Chestnut Ridge Air, Ltd. v. 1260269 Ontario Inc.

13 Misc. 3d 807
CourtNew York Supreme Court
DecidedJuly 31, 2006
StatusPublished

This text of 13 Misc. 3d 807 (Chestnut Ridge Air, Ltd. v. 1260269 Ontario Inc.) is published on Counsel Stack Legal Research, covering New York Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Chestnut Ridge Air, Ltd. v. 1260269 Ontario Inc., 13 Misc. 3d 807 (N.Y. Super. Ct. 2006).

Opinion

[808]*808OPINION OF THE COURT

Rolando T. Acosta, J.

Background

The facts in this case are fairly straightforward. In July 1999, plaintiff Chestnut Ridge Air, Ltd. purchased the aircraft at issue in this case. Corporate Air Management (CAM), a Michigan-based corporation, maintained and managed the aircraft for Chestnut. In August 1999, CAM engaged defendant Sky Harbour, a Canadian corporation, to strip, paint and refinish the aircraft. The work order, which was prepared by Sky Harbour, incorrectly listed CAM as the owner of the aircraft. According to plaintiff and CAM, Sky Harbour knew or should have known that CAM was not the owner because CAM sent Sky Harbour a copy of the registration, as noted on the work order, which identified Chestnut as the owner. In addition, Sky Harbour painted the tail registration number (N65DL) on the aircraft and it could have easily determined the owner through publicly available Federal Aviation Administration databases.

In March 2005, Jeffrey C. Collett, Chestnut’s principal pilot, noticed during a routine inspection that the paint on the right wing was bubbling. Further testing at two different locations revealed that there was extensive corrosion of the wings and it was eventually determined that the aircraft was unairworthy. The aircraft is currently not in use.

In its amended complaint, plaintiff raises two causes of action: breach of contract and negligence. Sky Harbour moved to dismiss the complaint on several grounds. First, it argues that this court lacks personal jurisdiction over it because it has no contacts with New York. It also argues that New York is an inconvenient forum. Last, it argues that plaintiff has failed to state a cause of action because the work order (contract) lists CAM as the owner and Chestnut is not mentioned anywhere in the contract, that the negligence action is nothing more than a recasting of the breach of contract action, and that, in any event, the statute of limitations ran on any negligence action.

Personal Jurisdiction

Pursuant to CPLR 301, this court may exercise jurisdiction over a party if it is “doing business” in New York State. A defendant is “doing business” in New York if it has engaged in such continuous and systematic course of activities in New York such that it can be deemed present in New York. (Frummer v Hilton Hotels Intl., 19 NY2d 533, 536 [1967].) The test for

[809]*809“ ‘doing business’ is a ‘simple [and] pragmatic one,’ which varies in its application depending on the particular facts of each case. The court must be able to say from the facts that the corporation is ‘present’ in the State ‘not occasionally or casually, but with a fair measure of permanence and continuity’ ” (Landoil Resources Corp. v Alexander & Alexander Servs., 77 NY2d 28, 33-34 [1990] [citations omitted]).

Although simple and pragmatic, “[t]he doing business standard is a stringent one because a corporation which is amenable to the Court’s general jurisdiction may be sued in New York on causes of action wholly unrelated to acts done in New York.” (Jacobs v Felix Bloch Erben Verlag fur Buhne Film und Funk KG, 160 F Supp 2d 722, 731 [SD NY 2001] [internal quotation marks omitted].)

In addition to the traditional indicia of “doing business” in New York, such as the existence of an office, bank account or other property in New York, jurisdiction over a foreign corporation exists where it solicits business in New York and engages in some other continuous activity. (Allojet PLC v Vantage Assoc., 2005 WL 612848, *6, 2005 US Dist LEXIS 4006, *29 [SD NY 2005] [once substantial solicitation is shown, “very little more is necessary to a conclusion of doing business” (internal quotation marks omitted)].) Solicitation in the jurisdictional context does not necessarily require solicitation in the sense of an offer of contract. (Wiwa v Royal Dutch Petroleum Co., 226 F3d 88 [2d Cir 2000].) Rather, the central question is whether the defendant behaved in such a way as to encourage others to spend money, or otherwise act, in a manner that would benefit defendant. (Id.)

Given the advances in communications technology, jurisdiction pursuant to CPLR 301 may be established through nontraditional methods. Thus, an interactive Web site may constitute solicitation activity to support a finding of jurisdiction under CPLR 301. (Thomas Publ. Co. v Industrial Quick Search, Inc., 237 F Supp 2d 489, 492 [SD NY 2002]; Citigroup Inc. v City Holding Co., 97 F Supp 2d 549, 566 [SD NY 2000].)

This is consistent with the New York Court of Appeals’ recognition that technological advances, such as e-mail and instant messaging, “enable a party to transact enormous volumes of business within a state without physically entering it.” (Deutsche Bank Sec., Inc. v Montana Bd. of Invs., 7 NY3d 65, 71 [810]*810[2006].) Accordingly (and although in the context of CPLR 302— long-arm jurisdiction), the Court in Deutsche Bank held that “when the requirements of due process are met ... a sophisticated [business] knowingly entering our state — whether electronically or otherwise — to negotiate and conclude a substantial transaction is within the embrace of the New York long-arm statute.” (Id. at 71.)

Here, Sky Harbour substantially solicits New York business through its interactive Web site. Indeed, the Internet user may obtain a quote on aircraft maintenance services; the Web site states that Sky Harbour will e-mail or send computer drawings to the customer for proposed painting projects; it maintains a “Forum” on the Web site that enables prospective customers to post questions directly to Sky Harbour personnel and receive replies regarding painting, maintenance and custom designed interiors that Sky Harbour can install; the Forum also allows users to post items for sale or rent; and it provides customers a “private website” to monitor a project’s daily progress. In essence, Sky Harbour created a virtual community in New York that meets all its clients’ needs. The fact that it is not physically in New York is of no moment. As the court noted in Thomas Publ. Co. v Industrial Quick Search, Inc. (237 F Supp 2d at 492, supra), “[i]f [defendant] wishes to operate an interactive website accessible in New York, there is no inequity in subjecting [defendant] to personal jurisdiction [in New York].”

Moreover, since its incorporation in 1997, Sky Harbour has engaged in continuous activity in New York. It performed work on an average of seven projects from New York customers (which Sky Harbour defined narrowly as only those customers with a “New York billing address”) annually and at least 4% of its revenue comes from these customers. These projects take on average 14 days to complete. Assuming working through the weekends, Sky Harbour averages 14 weeks a year on New York business.

Sky Harbour’s claim that this court lacks personal jurisdiction because Sky Harbour’s revenue from New York clients is less than 5% annually (see, e.g., Schottenstein v Schottenstein, 2004 WL 2534155, 2004 US Dist LEXIS 22648 [SD NY 2004]; Hutton v Priddy’s Auction Galleries, Inc., 275 F Supp 2d 428 [SD NY 2003]) is unavailing since it uses a narrow definition of “New York customers.” Given the nature of the business, where as in the facts of this case, Sky Harbour was contacted by CAM, a Michigan business, on behalf of a New York resident, and Sky [811]

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