| Shore Pharm. Providers, Inc. v Oakwood Care Ctr., Inc. |
| 2009 NY Slip Op 06245 [65 AD3d 623] |
| August 18, 2009 |
| Appellate Division, Second Department |
| Shore Pharmaceutical Providers, Inc., et al.,Appellants, v Oakwood Care Center, Inc., et al., Defendants, and Abraham Shaulson,Respondent. |
—[*1] Michael I. Bernstein, Brooklyn, N.Y., for respondent.
In an action, inter alia, to recover damages for violations of Debtor and Creditor Law§§ 273, 274, 275, 276-a and 278, the plaintiffs appeal from an order of the SupremeCourt, Nassau County (Warshawsky, J.), entered August 14, 2008, which granted the motion ofthe defendant Abraham Shaulson pursuant to CPLR 3211 (a) (8) to dismiss the complaint insofaras asserted against him.
Ordered that the order is reversed, on the law, with costs, and the motion is denied withoutprejudice to renewal upon the completion of disclosure on the issue of whether long-armjurisdiction may be established over the defendant Abraham Shaulson.
The plaintiffs alleged that they and their predecessors-in-interest provided pharmaceuticalsupplies and services in the amount of $768,562.23, for which they were not paid, to theOakwood Care Center, Inc. (hereinafter Oakwood), a nursing home in Nassau County which wasin receivership. In May 2007, the plaintiffs commenced this action, inter alia, to recover damagesbased on various sections of the Debtor and Creditor Law, against Oakwood, H.S. Care LLC(hereinafter HS Care), which was Oakwood's first receiver, Oakwood Operating Co., LLC(hereinafter Oakwood LLC), which was Oakwood's second receiver, and Henry Schoen, OttoWeingarten, and Abraham Shaulson, who were alleged to be the members of HS Care. Thecomplaint alleged that in early 2004 Oakwood LLC entered into an asset purchase agreementpursuant to which it purchased all of HS Care's assets relating to Oakwood for the principal sumof $4,000,000. Of that amount, $3,000,000 was to be paid directly to HS Care's three members,as evidenced by a promissory note in their favor. The complaint alleged that the transactionconstituted a fraudulent conveyance, and was an attempt to avoid HS Care's liabilities, which atthe time of the transaction exceeded $3,000,000.
All of the defendants except Shaulson answered the complaint. In lieu of an answer, [*2]Shaulson moved pursuant to CPLR 3211 (a) (8) to dismiss thecomplaint insofar as asserted against him for lack of personal jurisdiction. In his affidavit,Shaulson averred that he was a resident of Florida, had never been a member of HS Care, did notmaintain an office, bank accounts, employees, telephone lines, or mailing addresses in NewYork, and did not conduct any transactions in New York, either individually or in a corporatecapacity. In opposition, the plaintiffs submitted an affidavit from their counsel, to which wasattached, inter alia, documents related to the sale of HS Care to Oakwood LLC, including theasset purchase agreement, the schedule of HS Care's liabilities, and the promissory note. TheSupreme Court granted the motion, finding no evidence that Shaulson was a member of HS Careand noting that he was a resident and domiciliary of Florida at all relevant times. The plaintiffsappeal. We reverse.
Although a plaintiff bears the ultimate burden of proof on the issue of personal jurisdiction(see Cornely v Dynamic HVAC Supply,LLC, 44 AD3d 986 [2007]; Ying Jun Chen v Lei Shi, 19 AD3d 407, 407 [2005]), in opposinga motion to dismiss pursuant to CPLR 3211 (a) (8) on the ground that discovery on the issue ofpersonal jurisdiction is necessary, plaintiffs need not make a prima facie showing of jurisdiction,but instead must only set forth "a sufficient start, and show[ ] their position not to be frivolous"(Peterson v Spartan Indus., 33 NY2d 463, 467 [1974]; see American BankNote Corp. vDaniele, 45 AD3d 338, 340 [2007]; Ying Jun Chen v Lei Shi, 19 AD3d at 408;Cordero v City of New York, 236 AD2d 577 [1997]).
Here, Shaulson did not dispute his status as a payee on the subject $3,000,000 promissorynote, which contains a New York choice-of-law clause, and which was part of a $4,000,000 assetsale between two New York entities, HS Care and Oakwood LLC, the successive receivers ofOakwood, a New York nursing home. Under the circumstances, and given the "substantialrelationship between the transaction and the claim asserted" (Kreutter v McFadden OilCorp., 71 NY2d 460, 467 [1988]), i.e., that the subject promissory note was allegedly part ofa fraudulent conveyance to avoid HS Care's multimillion dollar liabilities to creditors, includingthe plaintiffs, the plaintiffs' opposition to Shaulson's motion was sufficient to warrant denial ofthe motion without prejudice to renewal upon completion of disclosure on the issue of whetherlong-arm jurisdiction may be established over Shaulson (see Fischbarg v Doucet, 9 NY3d 375, 380-381 [2007]; Wrightv 299 Union Ave. Corp., 288 AD2d 382, 383 [2001]; Multi-Modal Intl. v Anglia N.Am., 227 AD2d 600 [1996]; Staten Is. Hosp. v Alliance Brokerage Corp., 166 AD2d574, 576 [1990]). Mastro, J.P., Eng, Belen and Hall, JJ., concur.