Textile Technology Exchange v. Davis
New York Court of Appeals
81 N.Y.2d 56, 595 N.Y.S.2d 729, 611 N.E.2d 768 (1993)
- Written by Steven Pacht, JD
Facts
Textile Technology Exchange, Inc. (Textile) (plaintiff) sued Jack Davis (defendant), alleging that Davis breached a February 1986 oral agreement between the parties. Among other things, Davis’s answer contended that the court lacked personal jurisdiction because Davis was not served properly; Davis’s answer also asserted a counterclaim against Textile regarding certain pre-February 1986 transactions. At the end of trial, Davis moved to dismiss the complaint due to improper service. The supreme court denied the motion. Applying a rule developed by the appellate divisions that a defendant waived any jurisdictional defense by asserting a counterclaim unrelated to the plaintiff’s original claim, the supreme court denied Davis’s motion because Davis’s counterclaim regarding pre-February 1986 conduct was unrelated to Textile’s claim regarding Davis’s post-February 1986 contract compliance. A majority of the appellate division affirmed. However, two dissenting appellate-division judges concluded that Davis’s counterclaim was sufficiently related to Textile’s original claim because the parties began an ongoing relationship in 1985, and Textile’s suit concerned that relationship. Davis appealed.
Rule of Law
Issue
Holding and Reasoning (Smith, J.)
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