| Front, Inc. v Khalil |
| 2013 NY Slip Op 01006 [103 AD3d 481] |
| February 14, 2013 |
| Appellate Division, First Department |
| Front, Inc., Respondent-Appellant, v Philip Khalilet al., Appellants-Respondents. Philip Khalil, Third-Party Plaintiff-Appellant, v JeffreyA. Kimmel et al., Third-Party Defendants-Respondents. |
—[*1] Meister Seelig & Fein LLP, New York (Jeffrey A. Kimmel of counsel), forrespondent-appellant. Traub Lieberman Straus & Shrewsberry LLP, Hawthorne (Lisa L. Shrewsberry ofcounsel), for respondents.
Order, Supreme Court, New York County (Donna M. Mills, J.), entered May 25,2012, which, to the extent appealed from, granted defendants' motion to dismiss thecomplaint as against defendant James O'Callaghan for lack of personal jurisdiction,granted the motion as to defendant Eckersley O'Callaghan Structural Design (EOC) (withO'Callaghan, the UK defendants) to the extent of referring the issue of long-armjurisdiction pursuant to CPLR 302 (a), granted the motion to dismiss the first cause ofaction as against defendant Philip Khalil, denied the motion to dismiss the fifth througheleventh causes of action, and denied the motion to disqualify third-party defendantsfrom serving as counsel for plaintiff in the main action, and granted third-partydefendants' motion to dismiss the third-party complaint, unanimously modified, on thelaw, to deny defendants' motion to dismiss the complaint as against the UK defendantsfor lack of personal jurisdiction, and to grant the motion to dismiss the tenth and eleventhcauses of action as against the UK defendants, and otherwise affirmed, without costs.
The complaint alleges that Khalil, an employee of plaintiff, and employees of EOC,including O'Callaghan, worked together to use plaintiff's confidential and proprietaryinformation to divert work for Apple Inc., including a project for the Apple Store onBroadway in Manhattan, from plaintiff to Khalil and EOC. These allegations aresufficient to establish that the UK defendants transacted business in New York, throughKhalil as their agent, and therefore to invoke jurisdiction over them pursuant to CPLR302 (a) (1) (see New MediaHolding Co. LLC v [*2]Kagalovsky, 97 AD3d463 [1st Dept 2012]).
The allegations also are sufficient to establish that the UK defendants engaged intortious conduct in New York, again acting through Khalil as their agent, and thereforeto invoke jurisdiction pursuant to CPLR 302 (a) (2) (see Small v Lorillard TobaccoCo., 252 AD2d 1, 17 [1st Dept 1998], affd 94 NY2d 43 [1999]). This is sodespite the motion court's dismissal of the conspiracy claim (the first cause of action) asagainst Khalil (see Reeves v Phillips, 54 AD2d 854 [1st Dept 1976]).
We do not find that subjecting the UK defendants to jurisdiction in New York wouldoffend due process (see Kreutter v McFadden Oil Corp., 71 NY2d 460, 466[1988]).
The allegations that the UK defendants were aware that Khalil was plaintiff'sfull-time employee, and hired him and caused him to breach his duty to plaintiff, interalia, by inducing him to disclose plaintiff's confidential and proprietary information, statea cause of action for tortious interference with plaintiff's business relationship withKhalil (see Zimmer-Masiello, Inc. v Zimmer, Inc., 159 AD2d 363, 366 [1st Dept1990], lv dismissed 76 NY2d 772 [1990]).
The complaint alleges that Khalil used plaintiff's resources to do work for EOC,including accessing and forwarding to the UK defendants confidential information suchas the amount of plaintiff's bids on pending contracts, as well as "innovative technicaldetails" and "specialty glass details" that plaintiff had "custom-designed and developed"for several specified projects. These allegations state causes of action for unfaircompetition and misappropriation of trade secrets (see Eagle Comtronics v PicoProds., 256 AD2d 1202, 1203 [4th Dept 1998]; Sylmark Holdings Ltd. v Silicone Zone Intl. Ltd., 5 Misc 3d285, 287 [Sup Ct, NY County 2004]).
The complaint alleges aiding and abetting breach of fiduciary duty with the requisiteparticularity (see CPLR 3016 [b]; Stewart Tit. Ins. Co. v Liberty Tit. Agency, LLC, 83 AD3d532, 533 [1st Dept 2011]; National Westminster Bank v Weksel, 124 AD2d144, 149 [1st Dept 1987]).
The causes of action for a constructive trust and an accounting must be dismissed asagainst the UK defendants since plaintiff concededly had no fiduciary relationship withthem (see Krinos Foods, Inc. vVintage Food Corp., 30 AD3d 332 [1st Dept 2006]; Bouley v Bouley, 19 AD3d1049, 1051 [4th Dept 2005]). However, the complaint states causes of action for aconstructive trust over any monies or other property that may be identified as havingflowed from Khalil's usurpation of business opportunities from plaintiff and for anaccounting from Khalil (see Poling Transp. Corp. v A & P Tanker Corp., 84AD2d 796, 797 [2d Dept 1981]; Bouley, 19 AD3d at 1051).
Plaintiff's counsels' status as third-party defendants is not a sufficient basis fordisqualifying them (see Aryeh vAryeh, 14 AD3d 634, 634 [2d Dept 2005]).
As to the third-party complaint, an absolute privilege attaches to the statements madeby plaintiff's counsel in the April 2011 letters, because they were issued in the context of"prospective litigation" (seeSexter & Warmflash, P.C. v Margrabe, 38 AD3d 163, 174 [1st Dept 2007];Vodopia v Ziff-Davis Publ. Co., 243 AD2d 368 [1st Dept 1997]). Even viewedin the liberal light required on a motion to dismiss pursuant to CPLR 3211, thethird-party complaint and the documentary evidence fail, absent the libel claims, to allegethe "malice" or use of "improper or illegal means" required to state a cause of action fortortious interference with business relations (see Amaranth LLC v J.P. Morgan Chase & Co., 71 AD3d40, 47 [1st Dept 2009], lv dismissed in part, denied in part 14 NY3d 736[2010]).[*3]
We have considered defendants' remainingarguments for affirmative relief, including their contentions as to the cause of action forinjunctive relief, and find them unavailing. Concur—Mazzarelli, J.P., Friedman,Manzanet-Daniels, Román and Clark, JJ. [Prior Case History: 2012 NY SlipOp 31404(U).]