| Highfill, Inc. v Bruce & Iris, Inc. |
| 2008 NY Slip Op 03174 [50 AD3d 742] |
| April 8, 2008 |
| Appellate Division, Second Department |
| Highfill, Inc., Appellant, v Bruce and Iris, Inc., et al.,Respondents. |
—[*1] Bracken & Margolin, LLP, Islandia, N.Y. (Marilyn Lord-James and Linda U. Margolin ofcounsel), for respondents.
In an action to recover damages for breach of contract, the plaintiff appeals, as limited by itsbrief, from so much of an order of the Supreme Court, Suffolk County (Weber, J.), dated January18, 2007, as granted the defendants' motion to dismiss the complaint pursuant to CPLR 3211 (a)(3) and Business Corporation Law § 1312 (a).
Ordered that the order is affirmed insofar as appealed from, with costs.
The plaintiff, a Louisiana corporation, entered into a contract with the defendants pursuant towhich it was to conduct and manage a "going out of business sale" for the defendants. After adispute arose between the parties, the plaintiff commenced this action seeking to recoverdamages for breach of contract. The defendants moved to dismiss the complaint on the groundthat the plaintiff lacked standing to maintain the action in New York, since it was a foreigncorporation doing business in New York without authorization. Business Corporation Law§ 1312 (a) "constitutes a bar to the maintenance of an action by a foreign corporation" inNew York if that corporation is found to be "doing business" here without having obtained therequisite authorization to do so (Airline Exch. v Bag, 266 AD2d 414, 415 [1999]). Thequestion of whether a foreign corporation is "doing business" in New York "must be approachedon a case-by-case basis with inquiry made into the type of business being conducted"(Alicanto, S. A. v Woolverton, 129 AD2d 601, 602 [1987]). In order for a court to findthat a foreign corporation is "doing business" in New York within the meaning of BusinessCorporation Law § 1312 (a), "the corporation must be engaged in a regular and continuouscourse of conduct in the State" (Commodity Ocean Transp. Corp. of N.Y. v Royce, 221AD2d 406, [*2]407 [1995]). A defendant relying upon BusinessCorporation Law § 1312 (a) as a statutory barrier to a plaintiff's lawsuit "bears the burdenof proving that the [plaintiff] corporation's business activities in New York 'were not just casualor occasional,' but 'so systematic and regular as to manifest continuity of activity in thejurisdiction' " (S & T Bank v Spectrum Cabinet Sales, 247 AD2d 373, 373 [1998],quoting Peter Matthews, Ltd. v Robert Mabey, Inc., 117 AD2d 943, 944 [1986]). Absentsufficient evidence to establish that a plaintiff is doing business in this state, "the presumption isthat the plaintiff is doing business in its State of incorporation . . . and not in NewYork" (Cadle Co. v Hoffman, 237 AD2d 555 [1997]).
Here, the undisputed evidence submitted by the defendants demonstrated that the plaintiff'sbusiness activities in New York were not simply "casual or occasional," but rather the activitieswere "systematic and regular," intrastate in character, and essential to the plaintiff's corporatebusiness (see Parkwood Furniture Co. v OK Furniture Co., 76 AD2d 905 [1980]). Theplaintiff's regional vice-president for the northeast territory, as part of his job duties, regularlyand continuously solicited potential companies in New York in an effort to persuade thecompanies to retain the plaintiff to conduct and manage "special sales" in New York. He alsowas required to handle any problems that arose with respect to the "special sales" that took placewithin his territory, including New York.
Further, once engaged by a New York company to organize, conduct, and manage a "specialsale," the plaintiff maintained control over the operation of the sale by, inter alia, providing thecompany with a sales manager and salespersons to work at the sale. The sales manager andsalespersons would come to New York for approximately two to three months and sellmerchandise, including merchandise belonging to the plaintiff, to New York consumers. In fact,the plaintiff undertook an extensive advertising campaign with respect to the "special sales"aimed at New York consumers.
In addition, the plaintiff conducted and managed at least three sales in New York in oraround 2001 and 2002, which resulted in total sales of approximately $1,750,000. During thesix-month period from October 2005 until April 2006, there were at least six sales, in addition tothe defendants' sale, scheduled or already being conducted by the plaintiff in New York, whichresulted in sales totaling approximately $4,850,000.
Under such circumstances, the Supreme Court properly concluded that the plaintiff was"doing business" in New York within the meaning of Business Corporation Law § 1312 (a)(see Eli Lilly & Co. v Sav-On-Drugs, Inc., 366 US 276, 282 [1961]; Marion Labs. vWolins Pharmacal Corp., 28 NY2d 884 [1971]; Parkwood Furniture Co. v OK FurnitureCo., 76 AD2d at 905).
Contrary to the plaintiff's contention, there were no factual issues in dispute with respect towhether the plaintiff was doing business in New York sufficient to warrant a hearing. This casedoes not present a situation in which the motion should have been denied pending discovery,since any information regarding the plaintiff's business activities in New York was, and clearlyis, in the plaintiff's possession. Rivera, J.P., Santucci, Dickerson and Belen, JJ., concur.