M. Zara, for appellant.
P. Gleason, for respondent.
DiFIORE, Chief Judge:
issue on appeal is whether there is personal jurisdiction
over defendant, a Spanish winery, under New York's
long-arm jurisdiction statute, and consequently subject
matter jurisdiction over the parties' dispute under
Business Corporation Law § 1314 (b) (4). Because we
conclude that plaintiff's claim arises from
defendant's transaction of business in New York within
the meaning of CPLR 302 (a) (1), the Appellate Division order
granting summary judgment to defendant for lack of personal
and subject matter jurisdiction should be reversed.
Bodega Olegario Falcon Pineiro is a winery located in
Pontevedra, Spain. In March 2005, defendant entered into an
oral agreement there with plaintiff D & R Global
Selections, S.L., a Spanish limited liability company also
based in Pontevedra. Neither plaintiff nor defendant has
offices or a permanent presence in New York. Pursuant to
their oral agreement, plaintiff agreed to locate a
distributor to import defendant's wine into the United
States; in return, defendant agreed to pay commissions to
plaintiff at a specified rate on wine sales made to that
the agreement, defendant accompanied plaintiff to New York
several times to meet potential distributors and promote
defendant's wine. In May 2005, defendant attended the
Great Match Event in New York, which showcased wines from
Spanish vineyards. At that event, plaintiff introduced
defendant to Kobrand Corp. (Kobrand), a wine importer and
distributor located in New York. Defendant began selling wine
to Kobrand in November 2005. In January 2006, defendant
accompanied plaintiff to two events in New York that promoted
Kobrand's Spanish wine portfolio, including
defendant's wine. Defendant subsequently entered into an
exclusive distribution agreement with Kobrand. Through
November 2006, defendant paid commissions to plaintiff in
Spain on wine defendant sold to Kobrand. In or around January
2007, defendant stopped paying commissions to plaintiff even
as defendant continued to sell wine to Kobrand. Defendant
contends that its obligation to pay commissions under the
oral agreement expired after one year.
November 2007, plaintiff sued defendant in Supreme Court for
unpaid commissions. The complaint asserted causes of action
for breach of contract, quantum meruit, unjust enrichment,
and an accounting. Plaintiff alleged that defendant's
obligation to pay commissions on wine sold to Kobrand did not
terminate after a year but rather continued as long as
defendant sold wine to Kobrand. Defendant did not answer the
complaint or otherwise appear and, in June 2008, plaintiff
obtained a default judgment.
subsequently moved to vacate the default judgment and dismiss
the action for lack of personal and subject matter
jurisdiction. Supreme Court denied the motion to vacate and
therefore did not consider the motion to dismiss. The
Appellate Division reversed, vacated the default judgment,
and held that whether the court had personal jurisdiction
over defendant under CPLR 302 (a) (1) of New York's
long-arm jurisdiction statute raised an issue of fact (90
A.D.3d 403, 405-406 [1st Dept 2011]).
remand, defendant moved for summary judgment based on lack of
personal and subject matter jurisdiction. Supreme Court
denied the motion, citing the Appellate Division order.
Defendant again appealed and the Appellate Division reversed.
This time the Appellate Division held that defendant was not
subject to personal jurisdiction under CPLR 302 (a) (1). The
Appellate Division held that "defendant's visits to
New York to promote its wine constitute the transaction of
business here, " but concluded that "there is no
substantial nexus between plaintiff's claim for unpaid
commissions in connection with the sales of that wine,
pursuant to an agreement made and performed wholly in Spain,
and those promotional activities" (128 A.D.3d 486, 487
[1st Dept 2015]). This Court granted plaintiff leave to
appeal (26 N.Y.3d 914');">26 N.Y.3d 914 ).
302 (a) (1) provides, in relevant part:
to a cause of action arising from any of the acts enumerated
in this section, a court may exercise personal jurisdiction
over any non-domiciliary... who in person or through an
agent... transacts any business within the state or contracts
anywhere to supply goods or services in the state."
rule provides two distinct grounds for long-arm jurisdiction:
where a defendant "transacts business" in the state
and where a defendant "contracts anywhere to supply
goods or services" in the state. Under either ground, we
conduct a twofold jurisdictional inquiry (see Rushaid v
Pictet & Cie, 28 N.Y.3d 316, 323 ). First, the
defendant must have purposefully availed itself of "the
privilege of conducting activities within the forum
State" by either transacting business in New York or
contracting to supply goods or services in New York
(id. [citations ...