(1) Prima facie showing of conspiracy
To plead a cause of action for conspiracy under New York law, a plaintiff must allege the primary tort and four elements: (a) a corrupt agreement between two or more persons, (b) an overt act in furtherance of the agreement, (c) the parties' intentional participation in furtherance of a plan or purpose, and (d) the resulting damage or injury. Id. at 1267.
Plaintiff has made an adequate evidentiary showing of the existence of an agreement intentionally to use deception in an effort to steal plaintiff's technical secrets, existing customers, and prospective customers, thereby causing injury. Plaintiff also offers evidence that in furtherance of such conspiracy, the conspirators sent misleading communications to plaintiff, began to knock-off the Biofeedtrac trainer, formed two Delaware corporations, and committed numerous additional overt acts.
(2) Relationship between Gottesman and the alleged conspiracy
In order to show that a defendant was sufficiently connected with the New York actions of co-conspirators to establish jurisdiction under section 302(a)(2), plaintiff must show that: "(a) the defendant had an awareness of the effects in New York of its activity: (b) the activity of the co-conspirator in New York was to the benefit of the out-of-state conspirators; and (c) the co-conspirators acting in New York acted 'at the direction or under the control,' or 'at the request of or on behalf of' the out-of-state defendant." Id. at 1269 (citations omitted).
Gottesman contends that, while others may have conspired to engage in tortious conduct, he never joined the conspiracy. He portrays himself as a passive potential investor who merely listened to a series of business propositions but who took no steps to encourage others to knock-off the Biofeedtrac trainer. Plaintiff, on the other hand, portrays Gottesman as the "mastermind."
Plaintiff's evidence suggests that Gottesman's role fell between the two descriptions. That evidence shows that from as early as July 1989, Gottesman and Jordan began discussions to manufacture and market a trainer to compete with the Biofeedtrac trainer. Kuehn proposed then to pull his friend McGarry into the scheme. Gottesman participated in a telephone call in October with Jordan and Kuehn in which Kuehn informed them that the construction of the proposed trainer would violate the confidentiality and non-competition clauses of the Biofeedtrac-Kolinor distribution agreement, and that plaintiff also had certain patent protections. These facts were repeated, together with Kuehn's proposed plan of deception, in a facsimile transmission dated December 3, 1989 that Gottesman received.
By the spring of 1990 the alleged conspirators had developed a plan in which Gottesman and Jordan would jointly own 50% of the proposed venture. The various plans assumed that Gottesman would make a capital contribution of $ 250,000 until, shortly after this lawsuit was filed, McGarry seemingly advised Gottesman not to send the money.
After the scheme fell apart, Kuehn telephoned Gottesman and asked him to pay a bill for legal services that Jordan had refused to pay. Although Gottesman, too, refused to pay the bill, Kuehn seemingly believed that he had been performing work on behalf of both Jordan and Gottesman.
While plaintiff has adduced no single item of evidence establishing that Gottesman controlled the conduct of work done in New York in furtherance of the conspiracy, plaintiff has made a prima facie case that such New York activities were done at the request or on behalf of Gottesman, that Gottesman knew the scheme would impose injury upon the Brooklyn-based plaintiff, and that the activity of the New York-based Kuehn was intended to advance the objectives of the European based co-conspirators. At this stage of the litigation plaintiff need show no more in order for the court to exercise jurisdiction over Gottesman.
Gottesman makes no argument, and the court finds no reason to believe, that such exercise of jurisdiction would offend "'traditional notions of fair play and substantial justice.'" International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S. Ct. 154, 158, 90 L. Ed. 95 (1945) (citation omitted). Gottesman's "conduct and connection with the forum State are such that he should reasonably anticipate being haled into court here." World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 295, 100 S. Ct. 559, 566, 62 L. Ed. 2d 490 (1980).
The case as to Dov Gottesman's son Noam is entirely different. For the past five or six years he has been a resident of London, England, where he works for Goldman Sachs International. He is a citizen of Israel and the United States. While he does not do any business in New York in any systematic and continuous way, he visits New York several times a year either for vacation or for Goldman Sachs work.
He is connected to this lawsuit by the thinnest of threads. He was once Dr. Trachtman's patient. Dov Gottesman told Dr. Trachtman in 1988, when the two were discussing a joint venture, that he intended to involve his son Noam in the venture. Noam Gottesman briefly attended a portion of a meeting in London between his father and Dr. Trachtman in 1988 where he only listened. He attended a part of another meeting in London in 1990 where he again listened for 20 to 30 minutes before leaving.
Plaintiff has made no showing that Noam Gottesman should be subject to this court's jurisdiction under any theory. Plaintiff has introduced no evidence that he is domiciled here, that he does systematic and continuous business here, that he committed any tortious act within or without the state, or that he participated in a conspiracy to carry out a scheme to defraud.
Noam Gottesman's motion to dismiss for lack of personal jurisdiction is granted.
Kuehn moves to dismiss counts 8, 9, and 10 of the Complaint, alleging violations of the RICO Act, and count 12, alleging tortious interference with contractual relations. The parties have presented matters outside the pleadings, and the court intends to treat the motion as one for summary judgment.
Accordingly, Kuehn may submit additional papers by April 30, 1993 in support of his motion. He need not re-submit papers annexed to his affidavit of May 12, 1992. Plaintiff may submit responsive papers by May 21, 1993. It need not resubmit papers annexed to the affidavits of Dr. Trachtman, dated August 5, 1992, and William J. Dealy, dated August 10, 1992.
Plaintiff seeks an order from the court (i) declaring that the Codinas' have defaulted due to their failure timely to answer, (ii) enjoining them from disposing or encumbering property in the United States, and (iii) attaching a residential property in New Jersey.
The Codinas, still residing in Spain, have responded with a letter, written under penalty of perjury, contending that the court does not have personal jurisdiction over them and that, in any evert, they have done nothing wrong.
Upon receipt of the letter, the court informed plaintiff that it intended to construe the pro se letter as an answer to the Complaint, a response to plaintiff's motion, and a cross-motion to dismiss for, among other reasons, lack of personal jurisdiction.
The Codinas explain that after receiving the Second Amended Complaint they were unable to afford counsel and were uncertain how to proceed. Given that they have offered an excuse for their belated answer, that they could be found liable for more than $ 30 million if found to have defaulted, and that plaintiff has suffered little or no prejudice by the Codinas' delay in answering the Complaint, the court denies plaintiff's request for a default judgment.
The court now intends to treat the Codinas' letter as a motion, on behalf of themselves and Biotec, for summary judgment. Plaintiff has already submitted an opposing brief and supporting materials addressing the issue of personal jurisdiction.
Plaintiff is directed to submit by April 30, 1993 all material made pertinent to a motion for summary judgment by Rule 56. Plaintiff need not re-submit materials annexed to Dr. Trachtman's affidavit, dated June 24, 1992, and Dr. Trachtman's reply affidavit, dated October 27, 1992. The Codinas and Biotec may submit a reply by May 21, 1993.
The Gottesman's motion to dismiss for lack of personal jurisdiction is denied with respect to Dov Gottesman and granted with respect to Noam Gottesman.
The two motions to dismiss by defendant Kuehn and by the Codina defendants shall be treated as motions for summary judgment.
Dated: Brooklyn, New York
March 24, 1993
Eugene H. Nickerson, U.S.D.J.
© 1992-2004 VersusLaw Inc.