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3 No. 19
Andrew Greenberg, Inc.,
Appellant,
v.
Sir-Tech Software, Inc., et al.,
Defendants, Sir-Tech Canada, Ltd., et al.,
Respondents.


2005 NY Int. 8

February 15, 2005

This opinion is uncorrected and subject to revision before publication in the New York Reports.

Matthew J. Weiss, for appellant.
Michael Davidoff, for respondents.


ROSENBLATT, J.:

This appeal concerns New York's long-arm statute (CPLR 302 [a]) and its reach over certain Canadian defendants who, asserting a purported lack of jurisdiction over them, seek dismissal of the complaint. Plaintiff Andrew Greenberg, Inc. (AGI) has alleged that in 1979 it created the name, concept and plot for a computer fantasy role-playing game known as "Wizardry." Two years later, AGI and defendant Sir-Tech Software, Inc. (Sir-Tech S.I.) -- both New York corporations -- entered into an agreement granting Sir-Tech S.I. or a subsidiary the right to manufacture and market Wizardry, related products and any subsequent versions of the game.

The 1981 agreement called upon Sir-Tech S.I. to pay AGI a license royalty fee and a percentage of gross sales revenues. It further provided that Sir-Tech S.I. was to copyright the Wizardry games and related products in the name of AGI. The contract also stated that its provisions were binding on the parties' successors and assigns, and that Sir-Tech S.I. would not disclose any Wizardry game or related product, information or source of materials to anyone without written permission from AGI. In addition, all decisions concerning the assignment of rights under the Agreement required the consent of both parties.

The Wizardry game became successful, eventually resulting in several different versions and assorted related merchandise, as well as sub-licensing agreements. In 1991, however, Sir-Tech S.I. stopped sending royalty payments and accounting statements to AGI. Plaintiff alleges that Sir-Tech S.I. nevertheless continued to manufacture and sell subsequent versions of the Wizardry game and related products without furnishing AGI with any accounting or payment.

In 1992, AGI sued Sir Tech S.I. and Svane, Inc., its subsidiary, alleging that they had refused to pay royalties or account for them. After extensive discovery, AGI learned that Sir-Tech S.I. had closed its office in St. Lawrence County, dissolved the corporation and transferred its assets, the Wizardry trademarks and its domain name registration to Sirtech Canada, Ltd. and 1259190 Ontario, Inc., Canadian corporations formed by the same principals who owned Sir-Tech S.I.

After successfully joining the two Canadian corporations, AGI served its second amended complaint, seeking an accounting as a basis for a money judgment under the 1981 contract. AGI also alleged breach of contract, trade secret misappropriation and tortious interference. In essence, AGI asserted that Sir-Tech S.I. appropriated to itself the trademark registration for the Wizardry name and logo, despite AGI's co- ownership of the mark, and that the principals of Sir-Tech S.I. (Frederick Sirotek, Norman Sirotek and Robert Sirotek) reestablished themselves as Sirtech Canada and 1259190 Ontario, through which they continue to market and profit from the Wizardry product while depriving AGI of royalties or an accounting.

In a pre-answer motion, the Canadian defendants moved for dismissal of the second amended complaint pursuant to CPLR 3211 (8). They asserted that the court lacked personal jurisdiction over them because plaintiff had not satisfied the prerequisites of New York's long-arm statute. As relevant here, CPLR 302 (a) provides that a court may exercise personal jurisdiction over a non-domiciliary who

"1. transacts any business within the state or contracts anywhere to supply goods or services in the state; or

* * *

"3. commits a tortious act without the state causing injury to person or property within the state, except as to a cause of action for defamation of character arising from the act, if he

"(i) regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered, in the state, or

"(ii) expects or should reasonably expect the act to have consequences in the state and derives substantial revenue from interstate or international commerce * * *."

Supreme Court concluded that plaintiff had satisfied section 302 (a) (1) in that Sirtech Canada had allegedly entered into licensing agreements to market and sell Wizardry and related products in New York. The court noted that plaintiff produced sworn evidence that Sirtech Canada's games were offered for sale in New York and had submitted an exhibit consisting of packaging which listed the games' copyright as owned by Sirtech Canada. The court further concluded that AGI adequately alleged that Sir-Tech S.I., a New York corporation, assigned or transferred to Sirtech Canada the Wizardry trademark and copyrights along with the information necessary to develop the software for the games. Plaintiff also furnished evidence that Sirtech Canada purchased its web site domain name (www.sir-tech.com) from a New York resident, Sir-Tech S.I. Lastly, the court concluded that plaintiff, by producing records for the Ontario Ministry of Consumer and Commercial Relations, satisfactorily alleged that the principals of Sirtech Canada were the same as those of Sir- Tech S.I. and therefore were aware of the obligations and restrictions contained in the 1981 contract.[1]

The Appellate Division modified and dismissed the complaint, stating that plaintiff, in Supreme Court, did not raise CPLR 302 (a) (1) as a basis for long-arm jurisdiction and therefore did not preserve the issue ( see 297 AD2d 834). The court went on to hold that plaintiff did not satisfy its burden under the tortious act provisions of CPLR 302 (a) (3) (i) and (ii).[2]

In resisting the defendant's motion to dismiss the second amended complaint, plaintiff submitted abundant evidence to Supreme Court in support of its claims under CPLR 302 (a) (1). Indeed, the court centered its decision upon a host of allegations that the Canadian defendants, as successors of the New York corporation, continued to transact business in New York. We therefore conclude that plaintiff preserved its CPLR 302 (a) (1) argument. Moreover, we hold that plaintiff's allegations are sufficient to bring its claim within CLPR 302 (a) (1).[3] Plaintiff's allegations, if true, would establish that the Canadian defendants reincarnated themselves as successors to their New York business, and in their Canadian corporate capacity, continued to do business in New York in violation of their contractual obligations to plaintiff.

Accordingly, the order of the Appellate Division should be reversed, with costs, and the complaint reinstated.

Order reversed, with costs, and order of Supreme Court, Sullivan County, reinstated. Opinion by Judge Rosenblatt. Chief Judge Kaye and Judges Smith, Ciparick, Read and Smith concur. Judge Graffeo took no part.

Decided February 15, 2005


Footnotes

1   In determining that it had personal jurisdiction over the Canadian defendants, Supreme Court ruled that plaintiff had satisfied CPLR 302 (a) (1) (transacting business in New York) but not the tortious act provisions of CPLR 302 (a) (3).

2   While the Appellate Division was considering the validity of the second amended complaint, Supreme Court allowed plaintiff to interpose a third amended complaint, which the Appellate Division dismissed on the ground that its dismissal of the second amended complaint constituted the law of the case ( see 2 AD3d 1042). Plaintiff has appealed from the Appellate Division's dismissal of the third amended complaint, which brings up for review as well that court's dismissal of the second amended complaint.

3   Plaintiff's complaint should be reinstated because it has met the requirements of CPLR 302 (a) (1). While plaintiff argues compellingly that his second amended complaint may well have satisfied the dictates of CPLR 302 (a) (3) (i) and (ii), we need not reach that question, considering that New York's long-arm jurisdiction contains several bases, any one of which is sufficient to uphold the complaint ( see McGowan v Smith, , 52 NY2d 268 [1981]). Similarly, we do not address the question whether personal jurisdiction over the Canadian defendants may be based on the forum selection clause in the 1981 contract, or whether the third amended complaint (of which neither party informed the Appellate Division before that court wrote its decision dismissing the second amended complaint) rendered moot both the second amended complaint and the Appellate Division decision dismissing it.