Upon the following papers numbered 1-29 read on this motionto dismiss ; Notice of Motion and supporting papers 1-12 ; Notice of Cross Motion and supporting papers; Answering Affidavits and supporting papers13-28 ; Replying Affidavits and supporting papers 29 ; it is,

[*2]ORDERED that this motion by the defendants for an order dismissing the complaint is granted.

The plaintiff is a New York resident. In 2001, she purchased shares in the defendant Virtual Technologies, Inc. ("Virtual"), a Delaware corporation whose principal place of business was in California. Virtual subsequently changed its name to Global VR, Inc. ("Global"). Global is also a Delaware corporation whose principal place of business is in California. In 2003, the plaintiff loaned Virtual $50,000, which is evidenced by a subordinated convertible promissory note dated October 11, 2003 (the "note"). The note is governed by the laws of the State of California and indicates on its face that it was executed in California. Virtual/Global defaulted on the note, and the plaintiff commenced this action against Virtual; Global; Global Game Technologies, Inc.; and Global VR Extreme, Inc., whom the plaintiff contends were all doing business as Global VR. The complaint contains causes of action for breach of contract, money had and received, unjust enrichment, conversion, fraud, and prima facie tort. The defendants move to dismiss the complaint, inter alia, on the ground that the court does not have personal jurisdiction over them under New York's long-arm statute (CPLR 302 [a]).

CPLR 302 (a) (1) permits the New York courts to exercise personal jurisdiction over a nondomiciliary who transacts any business within the state if the plaintiff's claim arises from the transaction of such business (Opticare Corp. v Castillo, 25 AD3d 238, 243; Alexander, Practice Commentaries, McKinney's Cons Laws of NY, Book 7B, CPLR C302:6). Thus, the first requirement is that there be a transaction of business within New York (Opticare Corp. v Castillo, supra at 243). What constitutes the transaction of business has not been precisely defined, but it is clear that a single act may constitute a transaction as long as the defendant's activities here were purposeful and there is a substantial relationship between the transaction and the claim asserted (Id. at 243). The clearest case in which New York courts have CPLR 302 jurisdiction occurs when a defendant is physically present in New York at the time the contract establishing a continuing relationship between the parties was negotiated and made and the cause of action arose out of such contract (Reiner & Co. v Schwartz, 41 NY2d 648, 653). However, courts are generally loathe to uphold jurisdiction under the transaction-of-business prong of CPLR 302 if the contract at issue was negotiated solely by mail, telephone, and fax without any New York presence by the defendant (see, Patel v Patel, 497 F Supp 2d 419, 428 [EDNY]).

The Second Circuit has enumerated a variety of factors to be considered in determining whether an out-of-state defendant has transacted business in New York. They are: (i) whether the defendant has an on-going contractual relationship with a New York plaintiff, (ii) whether the contract was negotiated or executed in New York and whether, after executing the contract, the defendant visited New York for the purpose of meeting the parties to the contract regarding the relationship, (iii) the choice-of-law clause in the contract, (iv) whether the contract required the defendant to send notices and payments into the forum state or subjected them to supervision by a corporation in the forum state. Other factors may also be considered. No single [*3]factor is dispositive, and the ultimate determination is based on the totality of the circumstances (Id. at 427; Agency Rent A Car System, Inc. v Grand Rent A Car Corp., 98 F3d 25, 29 [2nd Cir]).

Although the plaintiff had an ongoing relationship with Virtual and Global, the record reflects that the note was negotiated solely by telephone and mail without any New York presence by the defendants, that the note is governed by the laws of the State of California, and that the defendants never visited New York after execution of the note to meet with the plaintiff. The note was executed simultaneously with a convertible promissory note purchase agreement that provided for notices to be sent to the plaintiff at her address in New York. However, the defendants never sent any payments into New York, and the defendants' correspondence with the plaintiff was limited to only a few letters and e-mails. The court finds that these contacts are insufficient to establish that the defendants intended to project themselves into ongoing New York commerce or that they purposefully availed themselves of the New York forum (see, Kimco Exchange Place Corp v Thomas Benz, Inc., 34 AD3d 433, 434 [defendants' acts of faxing executed contracts to New York and of making a few telephone calls did not qualify as purposeful acts constituting the transacting of business, but were merely attempts to contact plaintiff] Patel v Patel, supra at 428 [the only evidence plaintiffs proffered to support jurisdiction was that the parties had an ongoing relationship and that the defendants sent limited correspondence, invoices, or checks to one of the plaintiffs' offices in New York and communicated with the plaintiffs by telephone] Chong v Healthtronics, Inc., US Dist Ct, EDNY, June 20, 2007, Feuerstein, J. [2007 WL 1836831] [defendant's use of telephone, facsimiles, or e-mails to communicate with plaintiff in New York is insufficient]).

The plaintiff contends that Global VR transacts business in New York by selling products in New York through its distributor, Betson Enterprises, and by selling products directly to national chain restaurants "Dave and Busters" and "Chuck E. Cheese," which have outlets in New York. The presence of a distributor, without more, is insufficient to acquire jurisdiction over a foreign corporation (see, Jurlique, Inc. v Austral Biolab Pty., 187 AD2d 637, 640). Moreover, there must be a substantial nexus between the business transacted and the cause of action sued upon (see, Opticar Corp. v Castillo 25 AD3d at 246). The plaintiff's claim does not arise from the defendants' sale of products in New York. Accordingly, the court finds that there is no nexus between the business purportedly transacted by the defendants in New York and the plaintiff's claim.

The plaintiff contends that the court has jurisdiction over the defendants under CPLR 302 (a) (3). For jurisdiction to exist under CPLR 302 (a) (3), the commission of a tortious act outside the state must cause injury to person or property within the state. The plaintiff has failed to show that she sustained any injury other than financial loss in New York. Assuming that the plaintiff has viable tort claims, the situs of such a nonphysical commercial injury is the place where the critical events associated with the dispute took place, in this case California, and not where the resultant monetary loss occurred (see, Polansky v Gelrod, 20 AD3d 663, 664-665; American Para Professional Systems, v Labone, Inc., 175 F Supp 2d 450, 455 [EDNY]). The [*4]mere fact that the economic consequences of what transpired in California may be felt in New York due to the fortuitous location of the plaintiff in New York is not a sufficient basis for jurisdiction under CPLR 302 (a) (3) (Id.).

In any event, the plaintiff's tort claims claims (conversion, fraud, and prima facie tort) may not be used to acquire jurisdiction over the defendants because they are not viable tort claims. A simple breach of contract is not to be considered a tort unless a legal duty independent of the contract itself has been violated (see, Clark-Fitzpatrick, Inc. v Long Is. R.R. Co., 70 NY2d 382, 389). The plaintiff has failed to allege or demonstrate that the defendants owed her a legal duty independent of the contractual duty and that the defendants breached that independent duty (see, Clemens Realty v New York City Dept. of Educ., 47 AD3d 666, 667). When, as here, the plaintiff is essentially seeking enforcement of her bargain, the action should proceed under a contract theory (see, Sommer v Federal Signal Corp., 79 NY2d 540, 552). Accordingly, the causes of action for conversion, fraud, and prima facie tort are duplicative of the first cause of action for breach of contract.

Likewise, the existence of a valid and enforceable contract between the plaintiff and Virtual/Global precludes recovery in quasi-contract for events arising out of the same subject matter (see, Clark-Fitzpatrick, Inc. v Long Is. R.R. Co., supra 388). The plaintiff's causes of action for money had and received and for unjust enrichment sound in quasi-contract and arise out of the defendants' breach of the subordinated convertible promissory note dated October 11, 2003. Accordingly, they are duplicative of the first cause of action for breach of contract.

In sum, the complaint is dismissed in its entirety for lack of jurisdiction. The second through sixth causes of action sounding in tort and quasi contract are dismissed for the additional reason that they are duplicative of the first cause of action for breach of contract. Accordingly, the motion is granted.

DATED:January 14, 2014

J. S.C.