JOHN F. KEENAN, District Judge.
Before the Court is Defendant Robert B. Gold's motion to dismiss for lack of personal jurisdiction. For the reasons that follow, the motion is denied.
The following facts are drawn from the complaint and supporting documents, and are accepted as true only for purposes of this motion. Plaintiff Hui Ye is a resident of the People's Republic of China. (Compl. ¶ 4.) Defendant Gold Scollar Moshan, PLLC ("GSM") is a New York law firm organized under New York law. (
In or around 2013, Plaintiff retained GSM to represent her in connection with the purchase of an apartment at 400 Central Park West, New York, New York. (
On August 11, 2014, GSM sent a letter to Plaintiff informing her that her funds had gone missing. (
(Decl. of Vivian Chen, Ex. B, ECF No. 45.) The letter was signed by Defendant Michael Moshan.
Plaintiff alleges that, despite repeated demands, GSM has not returned the Closing Funds. (Compl. ¶ 22.) As a result, Plaintiff filed a complaint with this Court on September 23, 2014, asserting claims against all Defendants for legal malpractice, breach of fiduciary duty, misappropriation, conversion, and fraud. Plaintiff's allegations include that "instead of holding on to the [Closing Funds] on behalf of Plaintiff ..., Defendants have retained the [Closing Funds] to [sic] their own use." (
In response to the complaint, the Defendants have filed various cross-claims, including a cross-claim by Defendant Scollar against Defendant Gold and the other named Defendants.
Gold now moves to dismiss the complaint and cross-claim for lack of personal jurisdiction. In his motion and supporting declarations, Gold disputes his involvement in the alleged misconduct and asserts that he has had no association with GSM since 2009. (Decl. of Robert B. Gold, ECF No. 40 ¶¶ 5, 11.) Gold also states that, although he owns a summer home in Southampton, New York, he now lives and works in California. (
Where a motion to dismiss under Rule 12(b)(2) is brought prior to discovery, to defeat the motion a plaintiff must only make a prima facie showing of jurisdiction through the allegations in the complaint and any supporting documents.
Turning first to New York's jurisdictional requirements, the Court finds that Plaintiff has made a prima facie showing that jurisdiction is proper under New York's long-arm statute, N.Y. C.P.L.R. § 302(a). Pursuant to Section 302(a)(3) of that provision, New York courts may exercise jurisdiction over an out-of-state defendant where the non-domiciliary "commits a tortious act without the state causing injury to person or property within the state," if he "regularly does or solicits business, or engages in any other persistent course of conduct in New York." C.P.L.R. § 302(a)(3)(i). Courts within New York have interpreted this provision as requiring four elements: (1) that the defendant committed a tortious act outside New York; (2) that the cause of action arises from that act; (3) that the act caused injury to a person or property in New York; and (4) that the defendant regularly does or solicits business, or engages in any other persistent course of conduct in the state.
Although Gold disputes his involvement in the alleged misconduct, at this stage the Court must view the facts in the light most favorable to Plaintiff and resolve any factual disputes in Plaintiff's favor.
Here, Plaintiff alleges that she retained all of the named Defendants in connection with the purchase of a New York City apartment. (Compl. ¶ 12.) Based on this alleged relationship, the Defendants, including Gold, would have owed Plaintiff a fiduciary duty to safeguard property that Plaintiff entrusted to them.
Gold also argues that jurisdiction is improper because no affirmative "act" by Gold is alleged in the complaint. In so arguing, Gold seems to suggest that Section 302(a)(3)'s requirement of a "tortious act" precludes jurisdiction over claims arising from acts of omission. This unsupported suggestion is controverted by Second Circuit case law.
The next two elements required for jurisdiction under Section 302(a)(3)(i) do not appear to be in dispute. Plaintiff has alleged that her cause of action arises from Gold's tortious conduct, which satisfies the second element. (Compl. ¶¶ 52-55.) Plaintiff has also sufficiently alleged an injury in New York because "the first effect of the tort" would have been felt in New York, where the funds were allegedly misappropriated and where the closing on the apartment was scheduled to occur.
Lastly, Plaintiff's allegations and supporting documents are sufficient at this stage to support a finding that Gold has regularly done business or engaged in a "persistent course of conduct" in New York. C.P.L.R. § 302(a)(3)(i). Specifically, Gold is alleged to have been member of GSM, a New York law firm, during the time period at issue. (Compl. ¶ 9.) This allegation is supported by the fact that GSM's August 11, 2014 letter to Plaintiff listed Gold's name on the firm's letterhead. (Chen Decl., Ex. B.) Gold is also alleged to be a member of the New York bar. (Compl. ¶ 9.) Furthermore, according to records produced by Plaintiff, Gold served as a signatory on the New York—based IOLA Account where Plaintiff's funds were allegedly deposited. (Chen Decl., Ex. D.) Thus, resolving any factual disputes over Gold's continued involvement with GSM in Plaintiff's favor, Plaintiff has made a prima facie showing of jurisdiction under Section 302(a)(3)(i). The Court therefore need not address Plaintiff's alternative arguments for jurisdiction under Sections 302(a)(1) and 302(a)(2).
Having resolved the state-law jurisdictional questions, the Court must next determine whether exercising jurisdiction would comport with federal due process requirements. For jurisdiction to be consistent with due process, the defendant must have "certain minimum contacts" with the forum, which "exist where the defendant purposefully availed itself of the privilege of doing business in [New York] and could foresee being haled into court there."
Here, Gold's alleged roles as a member and manager of GSM and a signatory on the firm's New York-based IOLA Account would make it foreseeable that Gold could be haled to Court in New York on claims arising from those contacts. Furthermore, Gold has failed to present any argument that "the presence of some other considerations would render jurisdiction unreasonable."
Thus, the Court finds that exercising jurisdiction at this stage is reasonable and comports with the requirements of due process.
For the foregoing reasons, the Court finds that Plaintiff has made a prima facie showing that exercising personal jurisdiction over Gold at this stage is proper. Accordingly, Gold's motion to dismiss the complaint and cross-claim is denied.