was also issued. Compl. ¶ 10; Texas Judgment, p. 12, ¶ 7; see
also Permanent Injunction. It is undisputed that neither 3H nor Hochman
has paid either the judgment to the Santellanes or the attorney's fees
award to Dwyre.
It now appears that after having a similar judgment rendered in
Florida, 3H ceased doing business entirely. Neither of these judgments
has been paid by 3H. Mendelson Aff. ¶ 2; Dwyre Aff. ¶ 12.
Plaintiff Hochman contends that he stopped doing business in other states
for business reasons, but stopped doing business in Texas solely because
of the injunction issued against him. Hochman Second Aff. ¶¶ 3-5.
During the Texas litigation, while 3H was still actually defending the
action,*fn2 Dwyre served a notice to take the deposition of Hochman in
New York. Hochman moved to quash the notice, but his motion was denied.
The Court issued an order allowing Hochman the choice of appearing for
deposition in Texas on a specific date or arranging for a deposition in
New York with the costs to be paid by him.
Hochman failed to appear on the specified date, or to arrange for a New
York deposition after being ordered by the Texas court to do so.
Def.Mem.L., Ex. "3," Texas order. Thereafter Dwyre moved for contempt and
various discovery sanctions, including the striking of defendant's answer
and judgment as a matter of law. In that motion, Dwyre states, "[d]eath
penalty sanctions are warranted. This Defendant has failed to comply with
an important order of this Court and is not cooperating with discovery."
Id. An order resulted from this motion which states that "[d]efendant,
Steve Hochman is commanded to appear and show cause why he should not be
held in contempt of court for not appearing as ordered at his deposition
on June 11, 2001." Id. at Order. Plaintiff Hochman contends that this was
"an ex parte order commanding Hochman to appear in Texas for deposition
on August 2, 2001, or face the `death penalty'." Compl. ¶ 11. Hochman
never appeared before the Court to show cause why he should not be held
in contempt. Following the failure of Plaintiff Hochman to appear for the
third time, the Court entered a default judgment.
Plaintiffs now bring this action alleging that Dwyre and the
Santellanes were motivated by malice against him, and thus abused process
against him. He alleges that the default judgment in Texas effectively
precludes him from doing business in Texas, and he asks this Court to
award him damages for his emotional distress and his loss of business as
a result of the Texas judgment.
Defendants move to dismiss the complaint for lack of jurisdiction,
failure to state a claim upon which relief can be granted, and res
judicata. Defendants also move for sanctions against Plaintiffs and their
attorney. For the reasons that follow, Defendants motion to dismiss is
A. Personal Jurisdiction
Defendants contend that there is no personal jurisdiction over them
because they lack the minimum contacts with New York.
On a motion to dismiss for lack of personal jurisdiction, the Plaintiff
bears the burden of demonstrating the Court has jurisdiction. Kernan v.
Kurz-Hastings, Inc., 175 F.3d 236, 240 (2d Cir. 1999). Where the motion
to dismiss is made prior to discovery, the plaintiff can defeat the
motion with "legally sufficient allegations
of jurisdiction." Photoactive Productions, Inc. v. AL-OR International
Ltd., 99 F. Supp.2d 281, 285 (E.D.N.Y. 2000) (citations omitted). Thus,
the Plaintiff must make a "prima facie showing of jurisdiction."
Photoactive Productions, 99 F. Supp.2d at 285 (citations omitted). In
this diversity action, jurisdiction is determined by the law of the state
in which the federal court sits. Mario Valente Collezioni, Ltd. v.
Confezioni Semeraro Paolo, S.R.L., 264 F.3d 32, 35 (2d Cir. 2001);
Bensusan Restaurant Corp. v. King, 126 F.3d 25, 27 (2d Cir. 1997). Thus,
New York law determines whether jurisdiction exists.
1. New York Long Arm Jurisdiction
Plaintiffs seek to premise jurisdiction on New York's long-arm
provision, C.P.L.R. 302(a). C.P.L.R. 302(a) does not requite the same
level of contacts with New York as are required for jurisdiction under
C.P.L.R. 301. However, in order to exert jurisdiction under C.P.L.R.
302, the cause of action must arise out of the established contacts.
National Telephone Directory Consultants, Inc. v. Bellsouth Advertising
& Publishing Corp., 25 F. Supp.2d 192 (S.D.N.Y. 1998) (citations
omitted). Purposeful availment is the cornerstone of long-arm
jurisdiction in New York. See Courtroom Television Network v. Focus
Media, Inc., 264 A.D.2d 351, 695 N.Y.S.2d 17, 18 (1st Dep't 1999)
(citations omitted), Thus, jurisdiction is appropriate where the party
has projected itself into New York, and where it has put itself in the
position to receive the benefits of New York law and commerce. National
Telephone Directory, 25 F. Supp.2d at 196.
Further, when long arm jurisdiction is at issue, the Court must also
ensure that the exercise of jurisdiction does not implicate
constitutional concerns and will not offend "traditional notions of fair
play and substantial justice." People v. Concert Connection, Ltd.,
211 A.D.2d 310, 314, 629 N.Y.S.2d 254 (2nd Dep't 1995) (quoting
International Shoe v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90
L.Ed. 95 (1945)). Thus, certain "minimum contacts" must exist in order to
confer jurisdiction on the Court. Mario Valente Collezioni, Ltd., 264
F.3d at 35 (federal law of minimum contacts determines whether exercise
of jurisdiction is constitutional).
Plaintiffs makes a number of arguments regarding jurisdiction. The
Court will address each in turn.
2. C.P.L.R. 302(a)(2)
Plaintiffs first seek to premise jurisdiction on C.P.L.R. 302(a)(2).
That statute provides jurisdiction over a person who commits a tortious
act within New York. In relying on this provision, Plaintiffs contend
that because Defendant Dwyre issued process in New York, he committed a
tortious act within the state. See Pl.Mem.L. 14. What Plaintiffs seem to
ignore here is that the issuing of process is not the tortious act
complained of. Abuse of process does not concern the issuance of
process, but rather "`the improper use of process after it is regularly
issued.'" Labensky v. County of Nassau, 6 F. Supp.2d 161, 177 (E.D.N.Y.
1998) (quoting Cook v. Sheldon, 41 F.3d 73, 80 (2d Cir. 1994)). It is
this characteristic which distinguishes malicious prosecution*fn3
from abuse of process. Consequently, Plaintiffs have failed to make a prima
facie case based on the commission of a tort in New York.
3. C.P.L.R. 302(a)(1)
Jurisdiction under C.P.L.R. 302(a)(1) is appropriate where a person
transacts business within New York. Plaintiffs claim that even if the
issuance of process was not a tortious act within New York, it did
constitute a transaction of business within the meaning of the statute.
Pl.Mem.L. 16. In support of this contention, Plaintiffs cite Overmyer v.
Eliot Realty, 83 Misc.2d 694, 371 N.Y.S.2d 246 (N.Y.Sup.Ct.West.Co. 1975)
(Gagliardi, J.S.C.). In Overmyer, Judge Gagliardi found jurisdiction
where the defendant had participated in negotiations in New York, sent
representatives to New York to collect rents, and participated in the
reorganization of the plaintiff company in New York. 371 N.Y.S.2d at
252. Additionally, the defendant had sought enforcement of a judgment in
New York state court. Id.
Overmyer does not support the contention advanced by Plaintiffs here
that the sole act of paying for process to be issued in New York subjects
one to jurisdiction in New York. The defendant in Overmyer had
substantial contacts to New York, and, in fact, sought to have a judgment
enforced in New York. Those contacts are lacking here.
There are no allegations that would indicate the defendants transacted
business in New York. See Bensusan, 126 F.3d at 29 (must be effort on
part of defendant to enter New York law or commerce). Neither the
Santellanes nor Dwyre have sought enforcement of any part of the Texas
judgment in New York. The defendants did not even attempt to have the
contempt order of the Texas court enforced in New York. There are no
allegations that Dwyre or the Santellanes did business at any time in New
York. Thus, there exists no transaction of business in New York. See
Longines-Wittnauer Watch Co. v. Barnes & Reinecke, Inc., 15 N.Y.2d 443,
452, 261 N.Y.S.2d 8, 209 N.E.2d 68 (1965).
While this Court declines to decide whether process can ever serve as a
basis for jurisdiction, on the facts presented, no personal jurisdiction
exists over these defendants based on paying a process server to issue
process in New York.
4. Jurisdiction Under 302(a)(3)
Finally, Plaintiffs seek to premise jurisdiction on C.P.L.R.
302(a)(3). That statute provides in relevant part that jurisdiction
exists over a non-domiciliary who:
commits a tortious act without the state causing
injury to person or property within the state, . . .,
if he . . . (ii) expects or should reasonably expect
the act to have consequences in the state and derives
substantial revenue from interstate or international
N.Y.C.P.L.R. 302(a)(3) Jurisdiction over the Santellanes
Plaintiffs make no allegations regarding the revenue of the
Santellanes. The only statements in this regard come from the Santellanes
and their attorney. The Santellanes derive their sole income from their
nursing jobs in the State of Texas. Mauro Aff. ¶ 4-5; Theresa Aff.
¶ 4-5. Consequently, they do not "derive substantial revenue from
interstate or international commerce," and cannot be subject to
jurisdiction in New York pursuant to C.P.L.R. 302(a)(3). The action as to
the Santellanes is dismissed for lack of jurisdiction.
N.Y.C.P.L.R. 302(a)(3) Jurisdiction over Dwyre
Plaintiffs make no allegations of jurisdiction in the complaint. See
Complaint. In their first set of opposing papers, Plaintiffs make the
sole allegation that
one Connie Harris, acting on behalf of defendant
Dwyre, solicited JC Process to serve the papers,
transmitted them by mail to JC Process in New York,
along with them transmitted a check drawn on Dwyre's
firm as payment for the services.
Jordan Aff. ¶ 5. In their memorandum of law, Plaintiffs elaborate
that Plaintiffs Hochman and 3H were injured in New York by having their
business operations in Texas curtailed and their litigation in New York
ended. Plaintiffs then contend that Defendant Dwyre derived substantial
revenue from interstate commerce