L.F. Rothschild, Unterberg, Towbin v. McTamney

Order of the Supreme Court, New York County (H. Schwartz, J.), entered July 7,1981, denying defendant’s motion to dismiss the complaint pursuant to CPLR 3211 (subd [a], par 8), reversed, on the law and facts, and the motion by defendant to dismiss the complaint on grounds of lack of in personam jurisdiction is granted, with costs. Plaintiff, a stock brokerage firm, brought this action against defendant for the alleged breach of an agreement to purchase 1,000 shares of stock in World Wide Energy Corp. Defendant moved to dismiss on the grounds that the court did not have jurisdiction over his person. Special Term denied this motion citing Parke-Bernet Galleries v Franklyn (26 NY2d 13) and DuPont & Co. v Chelednik (69 Mise 2d 362), in support of its finding that it possessed in personam jurisdiction. This finding of the court below was in error. The defendant herein is a Pennsylvania resident. His only relevant contact with New York was several telephone conversations at his home in Pennsylvania with Steven Karanzalis, an account representative of plaintiff, L. F. Rothschild, Unterberg, Towbin (Rothschild) at the latter’s New York office. These telephone conversations resulted in a telephonic purchase order for the stock on October 28, 1980. Except for a letter which defendant sent to plaintiff’s office on November 17, 1980, protesting the purchase of the shares at issue, defendant had no other contact with New York. Defendant had previously had an account at Merrill Lynch where Karanzalis had been his account executive. This previous account is unrelated to the cause of action alleged herein and would, therefore, have no bearing on whether defendant is subject to “long-arm” jurisdiction pursuant to CPLR 302. (See Frummer v Hilton Hotels-Int., 19 NY2d 533.) CPLR 302 (subd [a], par 1) confers personal jurisdiction over any nondomiciliary who in person or through an agent “transacts any business within the state or contracts anywhere to supply goods or services in the state”. The telephone communications defendant had with plaintiff’s account executive from outside the State do not constitute sufficient contact with New York to confer personal jurisdiction over a nonresident under CPLR 302 (subd [a], par 1). (See Katz & Son Billiard Prods, v Corréale & Sons, 26 AD2d 52, affd 20 NY2d 903; Aero-Bocker Knitting Mills v Allied Fabrics Corp., 54 AD2d 647.) Parke-Bernet Galleries v Franklyn (supra), and DuPont & Co. v Chelednik (supra), relied upon by Special Term herein, are readily distinguishable. In Parke-Bernet, the Court of Appeals expressly adhered to its previously expressed view that where a defendant merely telephones a single order from outside New York, our courts would not have jurisdiction. In addition, the court found jurisdiction in Parke-Bernet because of that defendant’s direct and personal involvement in an ongoing auction sale conducted in New York by telephone from California through a representative present at the auction sale. Here defendant made a few telephone calls to plaintiff’s representative in New York concerning a single stock transaction. He had no representative in New York and no direct or personal involvement in any ongoing sale in New York. DuPont & Co. v Chelednik (supra), also relied upon by Special Term, was not decided under CPLR 302 (subd [a], par 1), but under CPLR 302 (subd [a], par 3), because plaintiff’s breach of contract action there was coupled with a tort claim for fraud. Plaintiff herein chose to deal with defendant at his Pennsylvania home solely over the telephone. Plaintiff did not require him to sign any documents opening an account or to visit its New York offices. Under these circumstances, involving one transaction, there was not sufficient purposeful activity within this State so as to confer in personam jurisdiction over defendant. (See Rothschild, Unterberg, Tobin v Thompson, 78 AD2d 795.) Concur — Sullivan, Silverman and Asch, JJ.