SUPREME COURT OF THE STATE OF NEW YORK

Appellate Division, Fourth Judicial Department

1050 

CA 11-00535 

PRESENT: FAHEY, J.P., PERADOTTO, LINDLEY, SCONIERS, AND GREEN, JJ. 

 

LHR, INC., PLAINTIFF-RESPONDENT-APPELLANT, 

V MEMORANDUM AND ORDER

T-MOBILE USA, INC. AND SUNCOM WIRELESS OPERATING 

COMPANY, LLC, DEFENDANTS-APPELLANTS-RESPONDENTS. 

 

JAECKLE FLEISCHMANN & MUGEL, LLP, BUFFALO (B. KEVIN BURKE, JR., OF

COUNSEL), FOR DEFENDANTS-APPELLANTS-RESPONDENTS. 

SCHRÖDER, JOSEPH & ASSOCIATES, LLP, BUFFALO (LINDA H. JOSEPH OF

COUNSEL), FOR PLAINTIFF-RESPONDENT-APPELLANT. 

 

Appeal and cross appeal from an order of the Supreme Court, Erie

County (John A. Michalek, J.), entered December 1, 2010. The order,

among other things, denied in part the motion of defendants to dismiss

the complaint and denied in part the cross motion of plaintiff seeking

leave to amend the complaint. 

It is hereby ORDERED that the order so appealed from is

unanimously modified on the law by granting that part of defendants’

motion to dismiss the negligence cause of action against defendant TMobile USA, Inc. and granting that part of plaintiff’s cross motion

for leave to amend the complaint to add a conversion cause of action

against that defendant and as modified the order is affirmed without

costs. 

Memorandum: Plaintiff, a debt collection agency and New York

corporation, commenced this action seeking damages resulting from

defendants’ alleged breach of contract and negligence with respect to

the sales by defendant SunCom Wireless Operating Company, LLC (SunCom)

of delinquent customer accounts to plaintiff. SunCom is a Delaware

corporation with a chief executive office in Pennsylvania. In

approximately September 2007, SunCom became a wholly-owned subsidiary

of defendant T-Mobile USA, Inc. (T-Mobile), a Delaware corporation

with retail stores throughout New York State. Defendants moved to

dismiss the complaint against SunCom on the ground that Supreme Court

lacked personal jurisdiction over SunCom. Defendants also moved to

dismiss the negligence cause of action against T-Mobile for failure to

state a claim pursuant to CPLR 3211 (a) (7). Plaintiff thereafter

cross-moved for, inter alia, leave to amend the complaint to add

causes of action for conversion and intentional interference with

contract against T-Mobile.
-2- 1050 

CA 11-00535 

On appeal, defendants contend that the court erred in denying

that part of their motion to dismiss the complaint against SunCom. We

reject that contention. Pursuant to New York’s long-arm statute, “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” (CPLR 302 [a] [1]). Plaintiff does not allege that the

court acquired personal jurisdiction under the “transacts any business

within the state” clause of the long-arm statute, but rather it

contends that personal jurisdiction was acquired because SunCom

“contract[ed] . . . to supply goods or services” in New York (id.). 

We agree with the court that, under the circumstances of this case,

SunCom’s sales to plaintiff of delinquent customer accounts

(hereafter, accounts) render it subject to the court’s jurisdiction

(see generally People v Concert Connection, 211 AD2d 310, 315, appeal

dismissed 86 NY2d 837). Here, the 28 purchase agreements executed by

plaintiff and SunCom that are the subject of the breach of contract

causes of action provide that “[a]ll [a]ccounts shall be delivered to

[plaintiff] by [SunCom] simultaneously with the payment of the

[p]urchase [p]rice” and that SunCom “shall provide . . . to

[plaintiff] copies of all [r]ecords reasonably requested by

[plaintiff].” The contracts therefore contemplated the delivery of

goods into New York, the location of plaintiff’s chief executive

office. Further, plaintiff submitted evidence in opposition to the

motion demonstrating that the information pertaining to the accounts

and all records relating thereto were delivered via email to

plaintiff’s office in New York. 

We agree with defendants, however, that the court erred in

denying that part of their motion seeking to dismiss the negligence

cause of action against T-Mobile (see generally Makuch v New York

Cent. Mut. Fire Ins. Co., 12 AD3d 1110, 1111; East Meadow Driving

School v Bell Atl. Yellow Pages Co., 273 AD2d 270), and we therefore

modify the order accordingly. “It is a well-established principle

that a simple breach of contract is not to be considered a tort unless

a legal duty independent of the contract itself has been violated”

(Clark-Fitzpatrick, Inc. v Long Is. R.R. Co., 70 NY2d 382, 389; see

IBM Credit Fin. Corp. v Mazda Motor Mfg. [USA] Corp., 152 AD2d 451,

453). Although a “defendant may be liable in tort when it has

breached a duty of reasonable care distinct from its contractual

obligations” (New York Univ. v Continental Ins. Co., 87 NY2d 308,

316), such “duty must spring from circumstances extraneous to, and not

constituting elements of, the contract” (Clark-Fitzpatrick, Inc., 70

NY2d at 389; see D’Ambrosio v Engel, 292 AD2d 564, lv denied 99 NY2d

503). 

Here, plaintiff alleged that T-Mobile, as a successor to the

purchase agreements, breached those agreements by failing to provide

plaintiff with documents necessary to verify its debt. Plaintiff

further alleged that, regardless whether T-Mobile is a party to those

agreements, T-Mobile is liable in tort on the basis that it had a duty

pursuant to the federal Fair Debt Collection Practices Act ([FDCPA] 15

USC § 1692 et seq.) to preserve and retain such documents. We agree

with defendants that there is no such duty under the FDCPA. The
-3- 1050 

CA 11-00535 

purpose of that statute is to safeguard consumers from abusive

practices by debt collectors (see 15 USC § 1692 [e]). Contrary to

plaintiff’s contention, the statute does not impose a duty on

creditors to ensure that debt sold or otherwise transferred to a debt

collector is in fact collectable. In the absence of the documents

necessary to verify the debt purchased from SunCom, plaintiff may

indeed be unable to collect such debt. Any duty to preserve and

produce documents necessary to verify the debt sold to plaintiff,

however, springs from the purchase agreements, not the FDCPA. Thus,

“plaintiff failed to show that there was a legal duty imposed upon [TMobile] independent of the contract itself, or that [T-Mobile] engaged

in tortious conduct ‘separate and apart from [its alleged] failure to

fulfill [its] contractual obligations’ ” (D’Ambrosio, 292 AD2d at 565,

quoting New York Univ., 87 NY2d at 316).

We agree with plaintiff on its cross appeal that the court abused

its discretion in denying that part of plaintiff’s cross motion

seeking leave to amend the complaint to assert a cause of action for

conversion against T-Mobile, and we therefore further modify the order

accordingly. “Generally, [l]eave to amend a pleading should be freely

granted in the absence of prejudice to the nonmoving party where the

amendment is not patently lacking in merit” (Anderson v Nottingham

Vil. Homeowner’s Assn., Inc., 37 AD3d 1195, 1198, amended on rearg 41

AD3d 1324 [internal quotation marks omitted]; see CPLR 3025 [b]). “To

establish a cause of action in conversion, the plaintiff must show

legal ownership or an immediate superior right of possession to a

specific identifiable thing and must show that the defendant exercised

an unauthorized dominion over the thing in question . . . to the

exclusion of the plaintiff’s rights” (Five Star Bank v CNH Capital

Am., LLC, 55 AD3d 1279, 1281 [internal quotation marks omitted and

emphasis added]). Here, although plaintiff does not own the account

records maintained by SunCom or T-Mobile, the purchase agreements

specifically provide that SunCom “shall provide, at no cost to

[plaintiff], copies of all [r]ecords reasonably requested by

[plaintiff]” and that, “[i]n the event that [those r]ecords . . . are

not available for a particular [a]ccount, [SunCom] will give

[plaintiff], in lieu of such [r]ecords, a duly executed and notarized

[a]ffidavit of [d]ebt” (emphasis added). Further, plaintiff alleged

that T-Mobile failed or refused to deliver those documents to it upon

request. We therefore conclude that plaintiff alleged sufficient

facts to state a cause of action for conversion.

Entered: October 7, 2011 Patricia L. Morgan

Clerk of the Court