Court Opinion

ID: 5856216
Source: CourtListenerOpinion
Date Created: 2022-01-13 01:04:41.24758+00
Date Added: 2024-06-11T08:44:16.596034
License: Public Domain

Kupferman, J. P., and Milonas, J.,
dissent in a memorandum by Milonas, J., as follows: In my opinion, the order of the Supreme Court, New York County (H. Schwartz, J.), entered July 7,1981, which denied the defendant’s motion to dismiss on the grounds of lack of in personam jurisdiction, should be affirmed. The instant case concerns an action commenced by plaintiff-respondent L. F. Rothschild, Unterberg, Towbin (Rothschild) against defendant-appellant Bernard McTamney, a Pennsylvania resident, for failing to make payment on amounts allegedly owed by him as a result of certain stock transactions. During the period from February of 1977 through December of 1979, the defendant maintained a margin account in New York City with Merrill Lynch, Pierce, Fenner & Smith, Inc. (Merrill Lynch). His broker at that company was Stephen G. Karanzalis who, in December of 1979, became an account executive with Rothschild. Thereafter, McTamney contacted Karanzalis by telephone on a number of occasions at plaintiff’s New York City office to discuss the stock market and various securities. Following at least three calls in October of 1980 regarding World Wide Energy Corporaton (WWEC) stock, defendant placed a telephone order on October 28, 1980 for 1,000 shares. Although Karanzalis initially purchased only 500 shares, McTamney directed him to buy another 500 shares at the prevailing market price. An account number was assigned in connection with the transaction. Rothschild then mailed confirmation of these two orders to the defendant, who subsequently wrote to plaintiff expressing his dissatisfaction over a broker’s error in the transaction. In this letter, dated November 17, 1980, the defendant referred to another telephone conversation which he had held with Karanzalis on October 30. After Rothschild instituted suit based upon defendant’s alleged default in payment, McTamney moved to dismiss on the ground that a single stock purchase by a nondomiciliary, involving telephone calls and incidental correspondence, does not constitute the transaction of business contemplated by CPLR 302 (subd [a], par 1), such as would confer in personam jurisdiction over the defendant. In denying the motion, Special Term, citing Parke-Bernet Galleries v Franklyn (26 NY2d 13) and DuPont & Co. v Chelednik (69 Misc 2d 362), found that defendant had transacted business within New York State. In Parke-Bernet Galleries v Franklyn (supra, p 17), the Court of Appeals held that “one need not be physically present in order to be subject to the jurisdiction of our courts under CPLR 302 for, particularly in this day of instant long-range communications, one can engage in extensive purposeful activity here without ever actually setting foot in the State.” Although the court did state that merely telephoning a single order from outside the State would not be sufficient to bestow jurisdiction, this is not the case here where, over a period of nearly four years, *542McTamney engaged in business dealings in New York with respect to securities transactions. Rather than being presented with the situation of one telephone call resulting in a simple order, what is at issue is a continuous course of conduct in which the defendant kept an active margin account with one company and then, when his personal broker moved to another firm, he, in effect, followed along. (See DuPont & Co. v Chelednik, supra, wherein the court declared that the operation of an account in New York constitutes the transaction of business within the State.) Moreover, even as to the particular purchase order in question, there were a series of telephone calls and accompanying correspondence. Clearly, the defendant was in the habit of doing business in New York involving securities transactions. Simply because McTamney’s broker changed his affiliation from one company to another does not divest New York State of jurisdiction. There can be little doubt that New York State would have had in personam jurisdiction over the defendant had the order been placed while Karanzalis was still at Merrill Lynch. (Rothschild, Unterberg, Towbin v Thompson, 78 AD2d 795.) What is crucial is not how much business the defendant conducted with this particular plaintiff but, rather, the extent of his related business activity in the State. Consequently, the order of Special Term should be affirmed.