Selections v. Pineiro

• Decision Date: 08 June 2017
• Docket Number: No. 63,63
• Parties: D & R Global Selections, S.L., Appellant, v. Bodega Olegario Falcon Pineiro, Respondent.
• Court: New York Court of Appeals Court of Appeals

2017 NY Slip Op 04494

D & R Global Selections, S.L., Appellant,
v.
Bodega Olegario Falcon Pineiro, Respondent.

No. 63

Court of Appeals of New York

Decided on June 8, 2017

Robert M. Zara, for appellant.

John P. Gleason, for respondent.

DiFIORE, Chief Judge:

The issue on appeal is whether there is personal jurisdiction over defendant, a Spanish winery, under New York's long-arm jurisdiction statute, and consequently subject matter jurisdiction over the parties' dispute under Business Corporation Law § 1314 (b) (4). Because we conclude that plaintiff's claim arises from defendant's transaction of business in New York within the meaning of CPLR 302 (a) (1), the Appellate Division order granting summary judgment to defendant for lack of personal and subject matter jurisdiction should be reversed.

I.

Defendant Bodega Olegario Falcon Pineiro is a winery located in Pontevedra, Spain. In March 2005, defendant entered into an oral agreement there with plaintiff D & R Global Selections, S.L., a Spanish limited liability company also based in Pontevedra. Neither plaintiff nor defendant has offices or a permanent presence in New York. Pursuant to their oral agreement, plaintiff agreed to locate a distributor to import defendant's wine into the United States; in return, defendant agreed to pay commissions to plaintiff at a specified rate on wine sales made to that distributor.

Following the agreement, defendant accompanied plaintiff to New York several times to meet potential distributors and promote defendant's wine. In May 2005, defendant attended the Great Match Event in New York, which showcased wines from Spanish vineyards. At that event, plaintiff introduced defendant to Kobrand Corp. (Kobrand), a wine importer and distributor located in New York. Defendant began selling wine to Kobrand in November 2005. In January 2006, defendant accompanied plaintiff to two events in New York that promoted Kobrand's Spanish wine portfolio, including defendant's wine. Defendant subsequently entered into an exclusive distribution agreement with Kobrand. Through November 2006, defendant paid commissions to plaintiff in Spain on wine defendant sold to Kobrand. In or around January 2007, defendant stopped paying commissions to plaintiff even as defendant continued to sell wine to Kobrand. Defendant contends that its obligation to pay commissions under the oral agreement expired after one year.

In November 2007, plaintiff sued defendant in Supreme Court for unpaid commissions. The complaint asserted causes of action for breach of contract, quantum meruit, unjust enrichment, and an accounting. Plaintiff alleged that defendant's obligation to pay commissions on wine sold to Kobrand did not terminate after a year but rather continued as long as defendant sold wine to Kobrand. Defendant did not answer the complaint or otherwise appear and, in June 2008, plaintiff obtained a default judgment.

Defendant subsequently moved to vacate the default judgment and dismiss the action for lack of personal and subject matter jurisdiction. Supreme Court denied the motion to vacate and therefore did not consider the motion to dismiss. The Appellate Division reversed, vacated the default judgment, and held that whether the court had personal jurisdiction over defendant under CPLR 302 (a) (1) of New York's long-arm jurisdiction statute raised an issue of

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fact (90 AD3d 403, 405-406 [1st Dept 2011]).

On remand, defendant moved for summary judgment based on lack of personal and subject matter jurisdiction. Supreme Court denied the motion, citing the Appellate Division order. Defendant again appealed and the Appellate Division reversed. This time the Appellate Division held that defendant was not subject to personal jurisdiction under CPLR 302 (a) (1). The Appellate Division held that "defendant's visits to New York to promote its wine constitute the transaction of business here," but concluded that "there is no substantial nexus between plaintiff's claim for unpaid commissions in connection with the sales of that wine, pursuant to an agreement made and performed wholly in Spain, and those promotional activities" (128 AD3d 486, 487 [1st Dept 2015]). This Court granted plaintiff leave to appeal (26 NY3d 914 [2015]).

II.

CPLR 302 (a) (1) provides, in relevant part:

"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 . . . transacts any business within the state or contracts anywhere to supply goods or services in the state."

This rule provides two distinct grounds for long-arm jurisdiction: where a defendant "transacts business" in the state and where a defendant "contracts anywhere to supply goods or services" in the state. Under either ground, we conduct a twofold jurisdictional inquiry (see Rushaid v Pictet & Cie, 28 NY3d 316, 323 [2016]). First, the defendant must have purposefully availed itself of "the privilege of conducting activities within the forum State" by either transacting business in New York or contracting to supply goods or services in New York (id....