Italian Exhibition Group USA, Inc. v. Bartolozzi

Background

Italian Exhibition Group USA, Inc. (IEG) sued Fabrizio Bartolozzi and Susan Paik after IEG acquired a majority interest in Bartolozzi’s company, FB International. The transaction included a stock-purchase agreement and two employment agreements. Those employment agreements kept Bartolozzi as president and Paik as general manager.

IEG asserted three claims against Paik: breach of fiduciary duty, aiding and abetting a breach of fiduciary duty, and tortious interference with contract. This opinion addressed only Paik’s renewed motion to dismiss for lack of personal jurisdiction, meaning she argued that the court did not have legal authority over her. The court had previously granted her jurisdictional motion but allowed IEG to amend its complaint.

IEG’s amended complaint alleged that Paik was personally involved in negotiating the stock-purchase agreement and related agreements. It alleged that she attended meetings in New York City with IEG representatives, helped schedule multiple New York meetings, and later communicated with IEG’s New York-based representative about FB International.

Personal Jurisdiction Under New York Law

IEG relied on New York Civil Practice Law and Rules § 302(a)(1), which permits jurisdiction when a defendant transacts business in New York and the claims arise from that business. The court did not address IEG’s separate argument that Paik was closely connected to the transaction’s forum-selection clause because the statutory argument was sufficient.

The court concluded that IEG’s allegations adequately showed that Paik transacted business in New York. New York’s statute requires only one qualifying transaction, and a single business meeting in New York may be enough. The court found that Paik’s meetings and follow-up communications were alleged to have advanced the negotiation and performance of the agreements involving the sale of FB International.

The court said it did not matter at this stage that the complaint was unclear about whether the agreements were ultimately signed in New York. Substantial negotiations in New York leading to an agreement can establish a meaningful connection with the state. The court also noted Paik’s alleged business activities at the Javits Center and her alleged control of the company’s New York bank account as additional contacts.

The court further found the required connection between Paik’s New York activities and IEG’s claims. The agreements established an ongoing relationship in which IEG acquired FB International and Paik became its general manager. That relationship was sufficiently related to the alleged fiduciary duties. The court found the connection especially clear for the tortious-interference claim because that claim concerned interference with the agreements themselves.

Constitutional Due Process

After finding a basis for jurisdiction under New York law, the court considered whether exercising jurisdiction would comply with constitutional due process. This requires sufficient minimum contacts with the forum and a reasonable exercise of jurisdiction.

The court found sufficient minimum contacts because Paik allegedly traveled to New York to negotiate the agreements and continued negotiating with IEG’s New York representative afterward. Those contacts were not random or accidental. Her other alleged New York activities, including business at the Javits Center and control of a New York bank account, supported the same conclusion.

The court also found that litigating in New York would not be unreasonably burdensome for Paik, whom the opinion describes as a resident of northern New Jersey. IEG and the court system had strong interests in keeping the case in New York because related litigation involving IEG and Bartolozzi would continue there.

Additional Arguments

The court rejected Paik’s argument that a New Jersey forum-selection clause in her employment agreement required a different result. The clause applied only to actions brought to enforce that agreement. The court concluded that IEG’s fiduciary-duty claim was independent of the employment agreement and that the aiding-and-abetting and tortious-interference claims did not seek to enforce that agreement.

The court also rejected Paik’s argument that New York contacts made while she acted as general manager could not be attributed to her personally. An employee’s status does not automatically prevent a court from considering the employee’s individual contacts with the forum.

Disposition

The court held that IEG had made the required preliminary showing of personal jurisdiction over Paik. Defendant Paik’s motion to dismiss was DENIED, and the clerk was directed to close docket entry 88. The opinion did not decide the merits of IEG’s underlying claims.