| Stardust Dance Prods., Ltd. v Cruise Groups Intl., Inc. |
| 2009 NY Slip Op 04339 [63 AD3d 1262] |
| June 4, 2009 |
| Appellate Division, Third Department |
| Stardust Dance Productions, Ltd., Also Known as Stardust DanceProductions, Inc., et al., Appellants, v Cruise Groups International, Inc., et al.,Respondents. |
—[*1] Stein & Stein, Haverstraw (William M. Stein of counsel), for respondents.
Stein, J. Appeal from an order of the Supreme Court (Sackett, J.), entered November 13,2008 in Sullivan County, which granted defendants' motion to dismiss the complaint.
Plaintiffs Leonard Moskowitz and Linda Gilberg are the codirectors and sole shareholders ofplaintiff Stardust Dance Productions, Ltd. Stardust organizes ballroom dancing weekends atvarious hotels which are primarily situated in the Hudson Valley and Catskill resort areas ofNew York. Defendant Drew Axelrod is a Florida resident and president of defendant CruiseGroups International, Inc., a company incorporated in Florida that organizes dance cruises onships departing from Florida. In early 2007, Moskowitz contacted Axelrod by telephone at hisoffice in Florida to express an interest in forming a relationship with Cruise Groups to organizeballroom dancing cruises on Florida-based cruise ships. Ultimately, the parties agreed tocosponsor two such cruises in the Caribbean in early 2008. Cruise Groups was in charge of allaspects of the actual cruises, including booking the ships, collecting fares, organizing danceactivities on the ships and paying the majority of the expenses. Stardust printed advertisingbrochures and distributed them to ballroom dancers, travel agents, dance studios and danceinstructors in New York. Although Axelrod booked the first "Stardust Dance Cruise" with acruise line in April 2007, the joint venture was not formalized by a written agreement untilNovember 2007. Pursuant to the agreement, the profits were to be divided equally between the[*2]parties.
After Cruise Groups allegedly failed to pay some or all of the commissions promised to thevarious entities that recruited passengers for the cruises—causing Stardust to take on theresponsibility of compensating those entities in order to maintain its business relationships withthem—plaintiffs commenced this action seeking a full accounting from defendants of allrevenue, income, expenses and disbursements of the joint venture. Supreme Court granteddefendants' motion to dismiss the complaint for lack of personal jurisdiction, prompting thisappeal.
As relevant here, New York courts may exercise personal jurisdiction over a nondomiciliarywho "transacts any business within the state" (CPLR 302 [a] [1]). The burden of proof is on theparty seeking to assert jurisdiction (see Spectra Prods. v Indian Riv. Citrus Specialties,144 AD2d 832, 833 [1988]). Evidence of even one transaction in New York may be sufficient toestablish personal jurisdiction "so long as the defendant's activities here were purposeful andthere is a substantial relationship between the transaction and the claim asserted" (Kreutter vMcFadden Oil Corp., 71 NY2d 460, 467 [1988]; see Corporate Campaign v Local 7837,United Paperworkers Intl. Union, 265 AD2d 274, 274-275 [1999]). "Purposeful activities arethose with which a defendant, through volitional acts, 'avails itself of the privilege of conductingactivities within the forum [s]tate, thus invoking the benefits and protections of its laws' " (Fischbarg v Doucet, 9 NY3d 375,380 [2007], quoting McKee Elec. Co. v Rauland-Borg Corp., 20 NY2d 377, 382 [1967]).Thus, a meeting of parties in New York, even for just one day, may be enough to subjectdefendants to New York jurisdiction, depending on the nature and extent of the defendants'activities in the state (see Presidential Realty Corp. v Michael Sq. W., 44 NY2d 672, 673[1978]; L&R Exploration Venture vGrynberg, 22 AD3d 221, 221 [2005], lv denied 6 NY3d 749 [2005]; Giant Group v Arthur Andersen LLP,2 AD3d 189, 190 [2003]; Fabrikant & Sons v Adrianne Kahn, Inc., 144 AD2d 264,264-265 [1988]).
Here, it is undisputed that defendants do not have an office in New York and that the jointventure agreement was executed in Florida. However, plaintiffs allege that Axelrod engaged inpurposeful activities in New York which were substantially related to the joint venture and theaction for an accounting. Specifically, they claim, in a sworn affidavit, that Axelrod personallyattended meetings in New York concerning the joint venture on two occasions—once inJune 2007 and again in September 2007—and that he solicited travelers for the dancecruises while at these meetings. The meetings took place during "dance weekends" sponsored byStardust at Kutchers Country Club in Sullivan County. Plaintiffs claim that Axelrod set up tablesin the main lobby of the hotel and was stationed thereat in order to display promotional materialsand respond to inquiries regarding the planned dance cruises. Plaintiffs submitted documentaryevidence, including a schedule of events for the June 2007 dance weekend, indicating thatAxelrod would be present at a particular time to "answer[ ] . . . questions about thefirst Stardust Dance Cruise scheduled for January 27-Feb 3, 2008" and a "Group Guest List"from the September 2007 dance weekend, on which Axelrod is marked as "staff."
Although Axelrod acknowledges that he was present in New York at the June and September2007 dance weekends, he denies that he was a staff member at either of those events or that heengaged in any solicitation of customers for the dance cruises during those weekends. Rather, heavers that he was there to participate in the scheduled dance activities for personal pleasure andmerely attempted to ascertain the level of interest in the dance cruises. Axelrod concedes that heattended a "Q & A" session during the June 2007 dance weekend, but claims [*3]that the purpose of that session was strictly limited to answeringbasic travel questions, such as about travel insurance and cruise ship policies. He alleges that nosales presentations were made during that weekend and that he had no registration materials athis disposal in accordance with Stardust's policy against having such materials available forfuture events at a current event.
The question of whether defendants' activities in New York are sufficient to conferjurisdiction in this state turns on whether such activities consisted of efforts in furtherance of thejoint venture and promotion of participation in the cruises and is not limited to whetherdefendants actually solicited individual customers (see generally Kreutter v McFadden OilCorp., 71 NY2d at 467; Corporate Campaign v Local 7837, United Paperworkers Intl.Union, 265 AD2d at 274-275). We are of the view that plaintiffs' evidence is sufficient toraise a question of fact in that regard, particularly since defendants had already contracted withthe cruise lines before Axelrod's activities related to the cruise took place in New York, arguablycasting some doubt on Axelrod's claims that he was merely attempting to assess the level ofinterest in the cruises. Where, as here, plaintiffs' assertions of conduct on defendants' part onwhich personal jurisdiction may be premised are not frivolous and are a sufficient start (seegenerally Augsbury Corp. v Petrokey Corp., 97 AD2d 173, 176 [1983]), the issue ofjurisdiction should not have been decided on the basis of conflicting affidavits (see Petersonv Spartan Indus., 33 NY2d 463, 467 [1974]; Longview Fibre Co. v Triple R Indus.,188 AD2d 983, 984 [1992]; Badger v Lehigh Val. R.R. Co., 45 AD2d 601, 603 [1974]).In the face of such conflicting affidavits, Supreme Court should have held a hearing to determinethe nature and extent of defendants' activities prior to making a determination (see Noble vSingapore Resort Motel of Miami Beach, 21 NY2d 1006, 1007 [1968]; Longview FibreCo. v Triple R Indus., 188 AD2d at 984; Chamberlain v Jiminy Peak, 155 AD2d768, 768 [1989]; Badger v Lehigh Val. R.R. Co., 45 AD2d at 603). Defendants' motionmust therefore be denied.
Mercure, J.P., Rose, Malone Jr. and Garry, JJ., concur. Ordered that the order is reversed, onthe law, with costs, and motion denied.