Stardust Dance Productions, Ltd. v. Cruise Groups International, Inc.

• Decision Date: 04 June 2009
• Docket Number: 506227.
• Citation: 881 N.Y.S.2d 192,63 A.D.3d 1262,2009 NY Slip Op 04339
• Parties: STARDUST DANCE PRODUCTIONS, LTD., Also Known as STARDUST DANCE PRODUCTIONS, INC., et al., Appellants, v. CRUISE GROUPS INTERNATIONAL, INC., et al., Respondents.
• Court: New York Supreme Court — Appellate Division

63 A.D.3d 1262

881 N.Y.S.2d 192

2009 NY Slip Op 04339

STARDUST DANCE PRODUCTIONS, LTD., Also Known as STARDUST DANCE PRODUCTIONS, INC., et al., Appellants, v. CRUISE GROUPS INTERNATIONAL, INC., et al., Respondents.

506227.

Appellate Division of the Supreme Court of New York, Third Department.

June 4, 2009.

Appeal from an order of the Supreme Court (Sackett, J.), entered November 13, 2008 in Sullivan County, which granted defendants' motion to dismiss the complaint.

Stein, J.

Plaintiffs Leonard Moskowitz and Linda Gilberg are the codirectors and sole shareholders of plaintiff Stardust Dance Productions, Ltd. Stardust organizes ballroom dancing weekends at various hotels which are primarily situated in the Hudson Valley and Catskill resort areas of New York. Defendant Drew Axelrod is a Florida resident and president of defendant Cruise Groups International, Inc., a company incorporated in Florida that organizes dance cruises on ships departing from Florida. In early 2007, Moskowitz contacted Axelrod by telephone at his office in Florida to express an interest in forming a relationship with Cruise Groups to organize ballroom dancing cruises on Florida-based cruise ships. Ultimately, the parties agreed to cosponsor two such cruises in the Caribbean in early 2008. Cruise Groups was in charge of all aspects of the actual cruises, including booking the ships, collecting fares, organizing dance activities on the ships and paying the majority of the expenses. Stardust printed advertising brochures and distributed them to ballroom dancers, travel agents, dance studios and dance instructors in New York. Although Axelrod booked the first "Stardust Dance Cruise" with a cruise line in April 2007, the joint venture was not formalized by a written agreement until November 2007. Pursuant to the agreement, the profits were to be divided equally between the parties.

After Cruise Groups allegedly failed to pay some or all of the commissions promised to the various entities that recruited passengers for the cruises—causing Stardust to take on the responsibility of compensating those entities in order to maintain its business relationships with them—plaintiffs commenced this action seeking a full accounting from defendants of all revenue, income, expenses and disbursements of the joint venture. Supreme Court granted defendants' motion to dismiss the complaint for lack of personal jurisdiction, prompting this appeal.

As relevant here, New York courts may exercise personal jurisdiction over a nondomiciliary who "transacts any business within the state" (CPLR 302 [a] [1]). The burden of proof is on the party seeking to assert jurisdiction (see Spectra Prods. v Indian Riv. Citrus Specialties, 144 AD2d 832, 833 [1988]). Evidence of even one transaction in New York may be sufficient to establish personal jurisdiction "so long as the defendant's activities here were purposeful and there is a substantial relationship between the transaction and the claim asserted" (Kreutter v McFadden Oil Corp., 71 NY2d 460, 467 [1988]; see Corporate Campaign v Local 7837, United Paperworkers Intl. Union, 265 AD2d 274, 274-275 [1999]). "Purposeful activities are those with which a defendant, through volitional acts, `avails itself of the privilege of conducting activities within the forum [s]tate, thus invoking the benefits and protections of its laws'" (Fischbarg v Doucet, 9 NY3d 375, 380 [2007], quoting McKee Elec. Co. v Rauland-Borg Corp., 20 NY2d 377, 382 [1967]). Thus, a meeting of parties in New York, even for just one day, may be enough to subject defendants to New York jurisdiction, depending on the nature and extent of the defendants' activities in the state (see Presidential Realty Corp. v Michael Sq. W., 44 NY2d 672, 673 [1978]; L&R Exploration Venture v Grynberg, 22 AD3d 221, 221 [2005], lv denied 6 NY3d 749 [2005]; Giant Group v Arthur Andersen LLP, 2 AD3d 189, 190 [2003]; Fabrikant & Sons v Adrianne Kahn, Inc., 144 AD2d 264, 264-265 [1988]).

Here, it is undisputed that defendants do not have an office in New York and that the joint venture agreement was executed in Florida. However, plaintiffs allege that Axelrod engaged in purposeful activities in New York which were substantially related to the joint venture and the action for an accounting. Specifically, they claim, in a sworn affidavit, that Axelrod personally attended meetings in New York concerning the joint venture on two occasions—once in June 2007 and again in September 2007—and that he solicited travelers for the dance cruises while at these meetings. The meetings took place during "dance weekends" sponsored by Stardust at Kutchers Country Club in Sullivan County. Plaintiffs claim that Axelrod set up tables in the main lobby of the hotel and was stationed thereat in order to display...