CLIFFSTAR CORPORATION v. CALIFORNIA FOODS CORPORATION (1998)

Plaintiff, a New York corporation, commenced this action against defendant, a California corporation, to recover damages arising from the alleged breach of an oral agreement to co-pack bottled iced tea for plaintiff at defendant's California plant.   Supreme Court denied defendant's motion insofar as it sought dismissal of the complaint or summary judgment dismissing the complaint based upon lack of personal jurisdiction and granted defendant's alternative request for removal of the action to California on the ground of forum non conveniens.   The court denied plaintiff's cross motion for summary judgment.

 The court erred in resolving the jurisdictional issue.   The parties submitted sharply conflicting proof concerning where the oral agreement was made, thereby raising a factual dispute with respect to whether defendant transacted business in New York (see, CPLR 302[a][1];  Juron & Minzner v. Dranoff & Patrizio, 180 A.D.2d 439, 579 N.Y.S.2d 95;  Firegreen Ltd. v. Claxton, 160 A.D.2d 409, 411-412, 553 N.Y.S.2d 765;  see also, Kolvek v. Ferrucci, 245 A.D.2d 1078, 667 N.Y.S.2d 554;  Graham v. Sylvan Lawrence Co., 82 A.D.2d 980, 440 N.Y.S.2d 405).  “Where the papers are insufficient to determine whether the court has jurisdiction, ordinarily there should be a hearing held where jurisdictional facts may be established” (Cato Show Print. Co. v. Lee, 84 A.D.2d 947, 949;, 446 N.Y.S.2d 710  see, Shea v. Hambro Am., 200 A.D.2d 371, 372, 606 N.Y.S.2d 198).

 We reject plaintiff's contention that jurisdiction may be premised upon CPLR 302(a)(3), based upon the financial loss allegedly suffered by plaintiff as the result of defendant's conduct.   Such loss is not a sufficient predicate for jurisdiction under that section (see, Fantis Foods v. Standard Importing Co., 49 N.Y.2d 317, 326-327, 425 N.Y.S.2d 783, 402 N.E.2d 122;  Cooperstein v. Pan-Oceanic Mar., 124 A.D.2d 632, 633-634, 507 N.Y.S.2d 893, lv. denied 69 N.Y.2d 611, 517 N.Y.S.2d 1025, 511 N.E.2d 84).

 Because the record fails to establish that the requirements for the exercise of long-arm jurisdiction have been met, the court erred in dismissing the action on forum non conveniens grounds.   That “doctrine has no application unless the court has obtained in personam jurisdiction of the parties” (Ehrlich-Bober & Co. v. University of Houston, 49 N.Y.2d 574, 579, 427 N.Y.S.2d 604, 404 N.E.2d 726).

We modify the order, therefore, by vacating the third ordering paragraph.

Order unanimously modified on the law and as modified affirmed without costs.

MEMORANDUM: