Sybron Corp. v. Wetzel

• Decision Date: 07 April 1978
• Citation: 61 A.D.2d 697,403 N.Y.S.2d 931
• Court: New York Supreme Court — Appellate Division
• Parties: , 204 U.S.P.Q. 66 SYBRON CORPORATION, Respondent, v. Alfred J. WETZEL and DeDietrich (U.S.A.), Inc., Appellants.

Page 931

403 N.Y.S.2d 931

61 A.D.2d 697, 204 U.S.P.Q. 66

SYBRON CORPORATION, Respondent, v. Alfred J. WETZEL and DeDietrich (U.S.A.), Inc., Appellants.

Supreme Court, Appellate Division, Fourth Department.

April 7, 1978.

Nixon, Hargrave, Devans & Doyle, Rochester, for respondent; Edward J. Burns, Rochester, of counsel.

Coudert Brothers, New York City, Harris, Beach, Wilcox, Rubin & Levey, Rochester, for appellants; John W. Clarke, Rochester, of counsel.

Before CARDAMONE, J. P., and DILLON, HANCOCK and DENMAN, JJ.

DENMAN, Justice.

Defendant Wetzel was employed for many years by Pfaudler, a subsidiary of plaintiff Sybron, which is engaged in the design, manufacture and sale of glass-lined chemical processing equipment. Defendant DeDietrich (USA) is an American subsidiary of DeDietrich & Cie, a French corporation also engaged in the manufacture of glass-lined chemical processing equipment. During the course of his employment with Pfaudler, Wetzel generally supervised the preparation, coating and firing of the glass used to line these metal vessels. He retired from Pfaudler in 1974 and moved to Florida. The former chief ceramist for Pfaudler, now employed by DeDietrich (USA), contacted Wetzel in Florida with an offer of employment to perform essentially the same type of work for defendant corporation as he had performed for many years for Pfaudler. Plaintiff instituted an action seeking to enjoin Wetzel from employment with DeDietrich, relying on a Patent and Trade Secret Agreement executed by Wetzel in 1961. It also seeks to enjoin DeDietrich from employing Wetzel and from soliciting any trade secrets from him. Plaintiff's motion for a preliminary injunction restraining Wetzel from disclosing trade secrets to and being employed by DeDietrich (USA) and restraining DeDietrich from employing or soliciting trade secrets from Wetzel was granted and defendants' cross-motion to dismiss for lack of jurisdiction was denied. Defendants appeal from that determination.

Trial Term properly found that there was a basis for personal jurisdiction over Wetzel under CPLR 302 (subd. (a), par. 1). The cause of action here asserted arises out of a contract executed in New York by defendant Wetzel while present in this state. He continued in the employ of plaintiff in New York for 13 years after executing the contract, acquiring the skills and knowledge central to the merits of this litigation. Following his retirement, Wetzel continued to receive pension checks from plaintiff at a New York address and continued to engage in special assignments on behalf of plaintiff. Examination of the relationship among the defendants; the forum and the litigation makes clear that his actions "certainly are of a nature and quality to be deemed sufficient to render him liable to suit here." (Reiner & Co. v. Schwartz, 41 N.Y.2d 648, 653, 394 N.Y.S.2d 844, 847, 363 N.E.2d 551, 554; see also, Singer v. Walker, 15 N.Y.2d 443, 261 N.Y.S.2d 8, 209 N.E.2d 68; GTP Leisure Prods. v. B-W Footwear Co., 55 A.D.2d 1009, 391 N.Y.S.2d 489; ABCKO Ind. v. Lennon, 85 Misc.2d 465, 377 N.Y.S.2d 362, affd., 52 A.D.2d 435, 384 N.Y.S.2d 781).

Service upon defendant Wetzel was also properly made. He had given up his Florida residence and, although he had leased an apartment in Union, New Jersey, had not as yet established residence there. He was in Rochester on a visit at his son's home, the address which he had designated for receipt of his pension checks. The process server went to that address and was told by defendant's son that his father was away for a few days but would return. The process server left the summons with the son and mailed a copy to defendant's former address in Florida. Additionally, an order to show cause issued the following day incorporated a direction that all of the papers and another copy of the summons be served on defendant's son at the same address that day. It is not contested that defendant was made aware of service in both instances and that he was on proper notice. "The crucial question for the court in each case should be whether the purpose of the statute . . . to give fair notice . . . is satisfied by the service in issue." (1 Weinstein-Korn-Miller, N.Y.Civ.Prac., par. 308.13).

It is difficult to see in what different way service could have been effected. Defendant had given up his Florida residence, had not as yet established residence in New Jersey and was not at the address in New York which he used for business purposes. To find that service was not proper under the facts here would mean that Wetzel was not amenable to process, a result which is patently untenable. We therefore find that service was proper under either CPLR 308 (subd. 2) or CPLR 308 (subd. 5) pursuant to court order.

Trial Term correctly determined that jurisdiction over DeDietrich cannot be founded on CPLR 301 as it cannot be construed as "doing business" in New York State. It does not have the kind of substantial and continuous business activities within the state which would justify a finding that it is " doing business" here (see, Carbone v. Fort Erie Jockey Club, 47 A.D.2d 337, 366 N.Y.S.2d 485; Meunier v. Stebo, Inc., 38 A.D.2d 590, 328 N.Y.S.2d 608).

Nor do we believe that jurisdiction can be based on CPLR 302 (subd. (a), par. 3) which provides for personal jurisdiction over a non-domiciliary who "commits a tortious act without the state causing injury to person or property within the state * * * if he * * * expects or should reasonably expect the act to have consequences in the state and derives substantial revenue from interstate or international commerce." The legislative history of that section indicates that it was enacted to fill the gap caused by the decision in Feathers v. McLucas, 15 N.Y.2d 443, 261 N.Y.S.2d 8, 209 N.E.2d 68, in which the court held that there was no jurisdiction over a Kansas manufacturer of a propane gas tank which exploded in New York causing property damage and personal injury. The section then was enacted to provide for such an act (the manufacture of the tank) occurring without the state and contemplated a personal injury occurring in New York. (See, Judicial Conference Report on the CPLR, 2 McKinney's 1966 Session Laws of N.Y., pp. 2780, 2787-2788; Memorandum of the Judicial Conference, id. at 2911). The alleged tortious act here, malicious interference with contract rights, is both speculative and anticipatory. The only act performed by defendant DeDietrich thus far is to employ Wetzel. The agreement executed by Wetzel with the plaintiff in 1961 does not prohibit his employment by a competitor, but merely the divulging of trade secrets. There is nothing to prevent him from employment with defendant corporation and that is the only act which has taken place. Therefore the first requirement of the statute has not been fulfilled, namely, there has been no tortious conduct. Additionally, possible consequences which might occur in the State of New York are tenuous at best. "Section 302(a)(3) is not satisfied by remote or consequential injuries which occur in New York only because the plaintiff is domiciled, incorporated or doing business in the state. See, Black v. Oberle Rentals, Inc., 55 Misc.2d 398, 285 N.Y.S.2d 226." (Friedr. Zoellner (New York) Corp. v. Tex. Metals Co., 2 Cir., 396 F.2d 300, 303; see also, American Eutectic Welding Alloys Sales Co. v. Dytron Alloys Corp., 2 Cir., 439 F.2d 428; Chemical Bank v. World Hockey Ass'n, D.C., 403 F.Supp. 1374; General Motors Acceptance Corp. v. Richardson, 59 Misc.2d 744, 300 N.Y.S.2d 757).

It would stretch the bounds of the statute beyond justifiable limits to find that defendant, a Delaware corporation based in New Jersey, hired defendant, a resident of Florida, and that in so doing it could have...