The opinion of the court was delivered by: VICTOR MARRERO, District Judge
In this contract dispute, the plaintiffs allege that they sold four
pieces of art to the defendants, who then resold the art before completing
payment. The defendants move to dismiss the complaint to the extent it
alleges any causes of action against the individual (as opposed to
corporate) defendant, Richard Love ("Love"), and to the extent the
complaint seeks relief for punitive damages. The motion is granted. The
plaintiffs move for summary judgment on their breach of contract claim,
but that motion is denied as premature. Finally, plaintiffs move to amend
their complaint. The proposed amended complaint is appropriate under the
Federal Rules of Civil Procedure's permissive amendment standards and
thus the motion is granted.
In each of four transactions in late 2002 and early 2003, one or more of the Plaintiffs (Spanierman Gallery, PSP, Spanierman
Gallery, LLC, and Adelson Galleries, Inc.) sold a piece of art to one or
more of the Defendants (R.H. Love Galleries, Inc., R.H. Love Galleries,
and Love), who then allegedly resold the art before fully paying. The
original complaint contained improper defendants and extraneous,
meritless causes of action, which, upon Defendants' motion, the Court
dismissed from the case. See Spanierman Gallery, PSP v. Love, No. 03
Civ. 3188, 2003 WL 22480055 (S.D.N.Y. Oct. 31, 2003). Plaintiffs'
pared-down first amended complaint now seek recovery under four causes of
action: (1) breach of contract, (2) violation of the Uniform Commercial
Code, (3) attorney's fees, and (4) punitive damages.
Defendants move to dismiss, in part, the first amended complaint
because they contend that the Court lacks personal jurisdiction over Love
and that punitive damages are improper as against any Defendants. The
Court's previous dismissal order had granted precisely this relief, but
the Court also granted Plaintiffs leave to re-plead those issues.
See id. at *2, *5.
In the same briefing in which Plaintiffs' oppose the motion to dismiss,
Plaintiffs move for summary judgment on their breach of contract claim
and move to amend their first amended complaint to add a fifth cause of
action for fraudulent conveyance.
The Court addresses each of the three motions in turn.
Defendants argue that the Court lacks jurisdiction over Love, an
Illinois resident. Plaintiffs bear the burden to show that there is a
basis for personal jurisdiction over Love, but at this pre-discovery
stage in the litigation, Plaintiffs may defeat Defendants' motion merely
by making legally sufficient allegations of personal jurisdiction. See In
re Magnetic Audiotape Antitrust Litig., 334 F.3d 204, 206 (2d Cir.
In diversity cases, such as this one, the Court looks to the forum
state's long-arm statute to determine whether a nonresident defendant may
be subject to the Court's personal jurisdiction. See Savin v. Ranier,
898 F.2d 304, 306 (2d Cir. 1990). In that regard, Plaintiffs rely upon
the provision of New York's long-arm statute that reaches any defendant
who "transacts any business within the state or contracts anywhere to
supply goods or services in the state." N.Y. C.P.L.R. § 302(a)(1).
Specifically, Plaintiffs allege that Love negotiated and executed the
contracts at issue in this lawsuit with the Plaintiffs, who are in New
York. The Court concludes that those allegations are insufficient.
Importantly, Plaintiffs do not allege that Love agreed to supply goods or services in New York; he agreed only to receive the
artwork from New York in Illinois. Love's only possible connection to New
York is that the Plaintiffs, to whom Love allegedly owes a debt, are in
New York. It is well-settled that an agreement to pay money in New York
is insufficient to satisfy § 302(a)(1). See American Recreation Group,
Inc. v. Woznicki, 448 N.Y.S.2d 51, 52 (App. Div.2d Dep't 1982); see also
Concrete Pipe & Prods. Corp. v. Modern Bldg. Materials, Inc.,
624 N.Y.S.2d 496, 497 (App. Div. 4th Dep't 1995) ("It is well established
that a foreign defendant whose only contact with New York is the purchase
of goods by telephone or mail from a New York plaintiff is not subject to
Plaintiffs next argue that, at least with respect to one contract
(pertaining to the so-called "Hassan" artwork), Love actually agreed to
be subject to personal jurisdiction in New York. Critical to this
determination is whether Love is personally bound by the Hassan contract.
The Court concludes that he plainly is not.
The buyer's signature line on that contract reads:
Agreed: /s/ Richard Love _____________________________
________________ (R.H. Love Galleries, Richard H.
(First Am. Compl. Ex. A) Plaintiffs argue that Love's signature is on
behalf of an unincorporated, nonexistent entity, "R.H. Love Galleries,"
as distinguished from defendant R.H. Love Galleries, Inc. Plaintiffs assert that, without the crucial
letters "Inc." on the signature line, Love is personally ...