Urfirer v. SB Builders, LLC

• Decision Date: 31 May 2012
• Parties: Michael URFIRER et al., Appellants, v. SB BUILDERS, LLC, et al., Respondents. (And a Third–Party Action.).
• Court: New York Supreme Court — Appellate Division

95 A.D.3d 1616

946 N.Y.S.2d 266

2012 N.Y. Slip Op. 04254

Michael URFIRER et al., Appellants,

v. SB BUILDERS, LLC, et al., Respondents.(And a Third–Party Action.).

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

May 31, 2012.

James M. Brooks, Lake Placid and Skadden, Arps, Slate, Meagher & Flom, L.L.P., New York City (Henry P. Wasserstein of counsel), for appellants.

Briggs Norfolk, L.L.P., Lake Placid (Matthew D. Norfolk of counsel) and McElroy, Deutsch, Mulvaney & Carpenter, L.L.P., Hartford, Connecticut (Thomas G. Librizzi of counsel), for respondents.

Before: MERCURE, J.P., ROSE, STEIN, GARRY and EGAN JR., JJ.

EGAN JR., J.

Appeal from an order of the Supreme Court (Muller, J.), entered July 29, 2011 in Essex County, which, among other things, partially granted defendants' cross motion to dismiss the amended complaint.

Plaintiffs, who are residents of Connecticut, entered into a contract with defendant SB Builders, LLC, a Connecticut limited liability company, for the construction of a multi-million dollar residence in the Village of Lake Placid, Essex County. At all times relevant, defendant Robert S. Carlson was a managing member of SB, and defendant Alan M. Ridgeway was an employee of SB. Both Carlson and Ridgeway, also residents of Connecticut, were identified as “key personnel” for purposes of the project and, pursuant to the terms of a rider to the construction contract, Ridgeway was to provide project management services during the construction of the home.

In addition to the foregoing, the parties contemplated that various subcontractors would be employed on the project and, to that end, the contract documents established a prescribed method of payment for those entities. Specifically, a subcontractor would submit its invoice to SB, which, in turn, would forward an application for payment to the project architect. Pursuant to the terms of the contract, this application represented a payment that SB had made (or intended to make) to the subcontractor, less a minor retainage. Assuming the application was approved, the architect would certify—and advise plaintiffs of—the sum due, and plaintiffs would then tender payment to SB.

As the project neared its scheduled completion date, plaintiffs discovered that certain subcontractors had stopped working—purportedly because they had not been paid by SB. When attempts to resolve these payment disputes proved unsuccessful, plaintiffs commenced this action alleging, among other things, breach of contract against SB and fraud against SB, Carlson and Ridgeway. Following joinder of issue, plaintiffs moved to, among other things, amend their complaint, and defendants cross-moved to dismiss the fraud cause of action. Supreme Court granted plaintiffs' motion to amend their complaint, as well as so much of defendants' cross motion as sought dismissal of the fraud claim against Carlson and Ridgeway based upon lack of personal jurisdiction. This appeal by plaintiffs ensued.

A New York court may exercise personal jurisdiction over a non-domiciliary who, either in person or through his or her agent, “transacts any business within the state or contracts anywhere to supply goods or services in the state” (CPLR 302[a][1]; see Stardust Dance Prods., Ltd. v. Cruise Groups Intl., Inc., 63 A.D.3d 1262, 1263–1264, 881 N.Y.S.2d 192 [2009] ). Notably, CPLR 302(a)(1) is a “single act statute” and, therefore, “proof of one transaction in New York is sufficient to invoke jurisdiction ... so long as the defendant'sactivities here were purposeful and there is a substantial relationship between the transaction and the claim asserted” ( Kreutter v. McFadden Oil Corp., 71 N.Y.2d 460, 467, 527 N.Y.S.2d 195, 522 N.E.2d 40 [1988];see Stardust Dance Prods., Ltd. v. Cruise Groups Intl., Inc., 63 A.D.3d at 1264, 881 N.Y.S.2d 192;Farkas v. Farkas, 36 A.D.3d 852, 853, 830 N.Y.S.2d 220 [2007];Bunkoff Gen. Contrs. v. State Auto. Mut. Ins. Co., 296 A.D.2d 699, 700, 745 N.Y.S.2d 247 [2002] ). As the parties seeking to assert personal jurisdiction, plaintiffs bear the burden of proof in this regard ( see People v. Frisco Mktg. of N.Y. LLC, 93 A.D.3d 1352, 1353, 941 N.Y.S.2d 823 [2012];Stardust Dance Prods., Ltd. v. Cruise Groups Intl., Inc., 63 A.D.3d at 1264, 881 N.Y.S.2d 192). “Such burden, however, does not entail making a prima facie showing of personal jurisdiction; rather, plaintiff[s] need only demonstrate that [they] made a ‘sufficient start’ to warrant further discovery” ( Bunkoff Gen. Contrs. v. State Auto. Mut. Ins. Co., 296 A.D.2d at 700, 745 N.Y.S.2d 247, quoting Peterson v. Spartan Indus., 33 N.Y.2d 463, 467, 354 N.Y.S.2d 905, 310 N.E.2d 513 [1974];see People v. Frisco Mktg. of N.Y. LLC, 93 A.D.3d at 1353, 941 N.Y.S.2d 823). In our view, plaintiffs met that burden here.

Plaintiffs allege that Carlson and Ridgeway personally executed or caused to be submitted allegedly fraudulent payment applications representing sums owed or paid to various New York subcontractors that, in reality, either were not due, had not been paid or were due in a sum less than the amount portrayed on the payment applications. Specifically, plaintiffs allege that Carlson and/or Ridgeway submitted...