Coast to Coast Energy, Inc., et al., Plaintiffs-Appellants, Margaret M. Spence, et al., Plaintiffs,
Mark Gasarch, et al., Defendants-Respondents. John and Jane Does 1-100, Defendants.
Offices of Edward J. Boyle, Manhasset (Edward J. Boyle of
counsel), for appellants.
Offices of Mark Gasarch, New York (Mark Gasarch of counsel),
for Mark Gasarch and Petro-Suisse Limited, respondents.
Engelhardt Law, New York (David Engelhardt of counsel), for
John Wampler, respondent.
J.P., Mazzarelli, Andrias, Manzanet-Daniels, Gesmer, JJ.
Supreme Court, New York County (Eileen Bransten, J.), entered
July 24, 2014, which, to the extent appealed from as limited
by the briefs, granted defendant John Wampler's motion to
dismiss the third amended complaint in its entirety, on
jurisdictional grounds, and granted the motion of defendants
Mark Gasarch and Petro-Suisse Limited to dismiss
plaintiffs' causes of action for breach of fiduciary
duty, breach of the covenant of good faith and fair dealing,
unjust enrichment, and plaintiffs' demand for punitive
damages, and dismissed the fraud cause of action only insofar
as asserted by plaintiffs Mark Gonsalves, Lawrence Doherty,
and the Coast to Coast plaintiffs, affirmed, without costs.
to CPLR 302(a)(1) a New York court may exercise personal
jurisdiction over a nondomiciliary if the nondomiciliary has
purposefully transacted business within the state and there
is "a substantial relationship between the transaction
and the claim asserted" (Paterno v Laser Spine
Inst., 24 N.Y.3d 370, 376  [internal quotation
marks omitted]). "Purposeful activities are volitional
acts by which the non-domiciliary avails itself of the
privilege of conducting activities within the forum State,
thus invoking the benefits and protections of its laws"
(id. [internal quotation marks omitted]). "More
than limited contacts are required for purposeful activities
sufficient to establish that the non-domiciliary transacted
business in New York" (id.).
motion to dismiss pursuant to CPLR 3211(a)(8), the plaintiff
has the burden of presenting sufficient evidence, through
affidavits and relevant documents, to demonstrate
jurisdiction (see Fischbarg v Doucet, 9 N.Y.3d 375');">9 N.Y.3d 375,
381 n5 ; Copp v Ramirez, 62 A.D.3d 23, 28 [1st
Dept 2009], lv denied 12 N.Y.3d 711');">12 N.Y.3d 711 ). Here,
plaintiffs failed to carry their burden in pleading
purposeful activities in New York by defendant John Wampler,
allegedly a resident of Switzerland and Texas, sufficient to
establish long-arm jurisdiction pursuant to CPLR 302(a)(1).
dissent would hold that in the third amended complaint
plaintiffs adequately pleaded jurisdiction under CPLR
302(a)(1) based on allegations that Wampler
"transacted" business in New York through his
agents, defendants Mark Gasarch and Petro-Suisse Limited
establish that a defendant acted through an agent, a
plaintiff must "convince the court that [the New York
actors] engaged in purposeful activities in this State in
relation to [the] transaction for the benefit of and with the
knowledge and consent of [the defendant] and that [the
defendant] exercised some control over [the New York
actors]" (Kreutter v McFadden Oil Corp., 71
N.Y.2d 460, 467 ). "[T]]o make a prima facie
showing of control, a plaintiff's allegations must
sufficiently detail the defendant's conduct so as to
persuade a court that the defendant was a primary actor'
in the specific matter in question; control cannot be shown
based merely upon a defendant's title or position within
the corporation, or upon conclusory allegations that the
defendant controls the corporation" (Northern Val.
Partners, LLC v Jenkins, 23 Misc.3d 1112 (A), ***4 [Sup
Ct, New York County 2009] quoting Karabu Corp. v
Gitner, 16 F.Supp.2d 319, 324 [SD NY 1998]; see also
Polansky v Gelrod, 20 A.D.3d 663, 664 [3d Dept 2005]).
dissent contends that the third amended complaint satisfies
these principles by virtue of plaintiff's allegations
that Wampler was in daily communication with PSNY concerning
the subject oil exploration partnerships and drilling
operations, that Wampler instructed Gasarch concerning
distributions and "routinely" directed him to
transfer funds, and that Gasarch acted for the benefit of and
with the knowledge and consent of Wampler, who exercised
"some control." However, Wampler's status as a
principal of PSNY does not in and of itself confer
jurisdiction. Plaintiffs failed to allege facts demonstrating
that Wampler controlled Gasarch and PSNY's activities
sufficient to support New York jurisdiction, and
plaintiff's vague, conclusory and unsubstantiated
allegations do not suffice to establish long arm jurisdiction
(see Cotia (USA) Ltd. v Lynn Steel Corp., 134 A.D.3d
483, 484 [1st Dept 2015] ["Plaintiff has offered nothing
but conclusory assertions to support long-arm jurisdiction
under CPLR 302 (a)(1)"]; Polansky v Gelrod, 20
A.D.3d at 664 ["plaintiff offers only the conclusory
allegation that Gelrod was their agent, with no supporting
evidentiary facts establishing control").
allegations that Gasarch only accessed PSNY's New York
bank accounts at Wampler's direction were previously
asserted upon information and belief in the second amended
complaint, and plaintiffs offered no new facts or explanation
for the change in the third amended complaint. Although
plaintiffs added an allegation that "according to bank
records, Wampler would routinely direct Gasarch to withdraw
investor funds from PSNY, " they provided no details
regarding any such bank records or how they might reflect
Wampler's involvement, and did not attach the bank
records as an exhibit to their complaint.
allegation that Wampler was in daily communication with PSNY
concerning the oil exploration partnerships and drilling
operations is conclusory, and plaintiff failed to proffer any
specific facts to demonstrate how or when Wampler
participated in preparing the Private Placement Memoranda for
the investments. Similarly, the allegation that Gasarch acted
for benefit of and with knowledge and consent of Wampler, who
exercised "some control" contains no detail as to
what statements were made, when they were made, what contract
they were made in regards to, and whether or not the alleged
misrepresentations were relied upon in such a way that would
dissent also cites plaintiffs' allegations that Wampler
personally solicited plaintiffs' investment in the funds
during several visits to New York in 2006 and 2007. However,
"the transitory presence of a corporate official"
does not support jurisdiction (see Fischbarg v
Doucet, 9 N.Y.3d at 380) and plaintiffs do not explain
how Wampler engaged in any tortious or actionable misconduct
at these meetings that would subject him to jurisdiction in
New York. There is no indication when the first two meetings
took place, other than providing the year; there is no detail
as to where the first meeting took place; it is not clear
which drilling projects the meetings pertained to; and the
allegations of Wampler's alleged misrepresentations are
provided in only very general terms (see Mahtani v C.
Ramon, 168 A.D.2d 371');">168 A.D.2d 371');">168 A.D.2d 371');">168 A.D.2d 371 [1st Dept 1990]). It is not
alleged that Wampler negotiated with a party, and the center
of gravity of the contract was in Trinidad and Tobago.
Mark Gonsalves has not pleaded his reliance on the alleged
misrepresentations, or injury, sufficient to support a claim
for fraud, as he did not allege that he invested in the
partnerships at issue (see Lama Holding Co. v Smith
Barney, 88 N.Y.2d 413, 421 ). The Coast to Coast