ALBERTO JOSE EDELMAN v. MERRILL LYNCH BANK AND TRUST COMPANY (CAYMAN) LIMITED

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-4529-06T34529-06T3

ALBERTO JOSE EDELMAN,

VIVIANA LEVY YEYATI, NATANIEL

ALEJANDRO EDELMAN, and SILVINA

EDELMAN,

Plaintiffs-Appellants,

v.

MERRILL LYNCH BANK AND TRUST

COMPANY (CAYMAN) LIMITED and

MERRILL LYNCH INVESTMENT

MANAGERS, L.P.,

Defendants-Respondents.

____________________________________

 

Argued October 21, 2008 - Decided

Before Judges Wefing, Yannotti and LeWinn.

On appeal from Superior Court of New Jersey,

Law Division, Bergen County, No. L-7233-06.

Susan J. Levy (Reiss Eisenpress) argued the cause for appellants (Ms. Levy and Sherri L. Eisenpress (Reiss Eisenpress) of the New York bar, admitted pro hac vice, attorneys; Ms. Eisenpress, of counsel; Ms. Levy, on the brief).

Tracey R. Seraydarian (Sidley Austin) of the New York and Pennsylvania bars, admitted pro hac vice, argued the cause for respondents (Bressler, Amery & Ross and Ms. Seraydarian, attorneys; Andrew W. Stern (Sidley Austin), Ms. Seraydarian, Brian F. Amery and David J. Libowsky, on the brief).

PER CURIAM

Plaintiffs appeal from trial court orders granting motions by defendants Merrill Lynch Bank and Trust Company (Cayman) Limited ("Bank") and Merrill Lynch Investment Managers, L.P., ("Investment") to dismiss plaintiffs' complaint. After reviewing the record in light of the contentions advanced on appeal, we reverse and remand for further proceedings.

This litigation arises out of a revocable inter-vivos trust created in 1992 by Raquel Calles de Edelman, a resident of Argentina. She traveled to Florida to execute the trust documents, which named defendant Bank as trustee. Defendant Bank has no offices, employees or assets in New Jersey, and is not registered to do business in New Jersey.

The trust document provided that the trust, which was funded with a corpus of $3.5 million, was established under the laws of the Cayman Islands. It did not, however, have a clause setting the venue for any action against the trustee.

The terms of the trust called for the net income to be paid to Mrs. Calles de Edelman and also authorized the trustee to make principal distributions to her or on her behalf. It further provided that upon her death, the income was to be paid to or on behalf of her son Alberto Jose Edelman and his wife, Viviana Levy Yeyati, for their lives. The ultimate remaindermen were the children of Alberto and Viviana, grandchildren of Mrs. Calles de Edelman, and plaintiffs in this action.

The trust instrument provided that defendant Bank would manage and invest the trust in accordance with any written instructions it might receive from Mrs. Calles de Edelman or if it received none, as its sole discretion indicated. The trust instrument conveyed very broad powers upon defendant Bank with respect to investing and managing the trust assets.

In 1995, Mrs. Calles de Edelman appointed a three-person Advisory Committee to assist her in managing the trust and in 1996 she executed a written memorandum of her wishes that was delivered to defendant Bank. Pertinent portions of this memorandum provided:

Upon my death, you should continue to hold the trust fund upon trust for the benefit of my son Alberto Jose Edelman ("Alberto"), all of his children (at the time of this writing Alberto has one son, Nataniel Alejandro Edelman and one daughter, Silvina Esther Edelman), and for my son's wife, Viviana Levy Yeyati ("Viviana"), except that you should exclude Viviana if she is subsequently divorced or estranged from Alberto, or if she was divorced or estranged from Alberto at the time of Alberto's death.

Upon my death, please provide for the medical care, health, maintenance, education, support, and general welfare of Alberto and his family. Considering that at present Alberto has other sources of income which should be sufficient for the needs of his family, it is my wish that some of the capital eventually be distributed to Alberto's children. Thereby, it is my wish that income disbursements to or for Alberto and his family be limited to thirty percent (30%) of the trust income (the remaining seventy percent (70%) of the trust income should be reinvested with the capital). As to any other disbursement of income or any capital disbursements, please consult with the Advisory Committee described below. In doing so, I ask that you take into consideration Alberto's and his family's other sources of income, their specific needs, and the need to maintain the trust for the long term period described herein. In other words, it is my wish that no income above thirty percent (30%) or any capital be distributed without prior approval from the below mentioned Advisory Committee. . . .

. . . .

Please note that although Alberto is a physician dedicated to clinical research, he has never really had the responsibility of earning his own money for his support and that of his family since I have always subsidized the income and provided funds for his medical care. It is highly likely that Alberto and his family will require assistance and support in managing their household finances. It is mainly due to these reasons that I have established this trust to help ensure the possibility that there may always be funds available for the maintenance and general welfare of Alberto and his family. . . .

Upon the demise of the survivor of myself and Alberto, please continue to hold the trust fund upon trust for the benefit of Alberto's children in equal shares. You should continue to provide for their health, maintenance, support, education, and general welfare. Until each of Alberto's children attains the age of twenty-one (21) years please disburse funds for the benefit of such children directly to them or to their mother, Viviana.

Upon the demise of the survivor of myself and Alberto, please continue to maintain upon trust thirty percent (30%) of the trust fund for the benefit of Viviana during her lifetime so long as she was not divorced or estranged from Alberto at the time of his death. Please pay the income of this part of the trust fund to Viviana throughout her lifetime. You may also provide for Viviana's medical or other essential needs which may not be covered from other sources. Upon the death of Viviana, please distribute this part of the trust fund to Alberto's children or their respective lineal descendants per stirpes as each of them attains the age of thirty-five (35) years.

In regard to the remaining seventy percent (70%) of the trust fund, upon the demise of myself and Alberto, and as each of his children attains the age of twenty-five (25) years, please distribute outright and free of trust twenty-five percent (25%) of each child's respective share of this part of the trust fund to each of them. As each of his children attains the age of thirty (30) years, please distribute outright and free of trust, the remainder of each child's respective share of this part of the trust fund to each of them.

In light of those expressed concerns, the trust assets were conservatively invested. At the time of her death in 2000, the trust corpus was valued at $3.53 million and consisted solely of fixed-income securities. After her death, the Advisory Committee informed defendant Bank that Alberto and his family would require income of approximately $80,000 to $90,000 per year from the trust.

In addition, shortly following her death, responsibility for this fund within defendant Bank was transferred to the Isle of Man and the supervision of Alexandra Dillon, Regional Section Head, and Brian Hatton, Trust Manager. Dillon and Hatton, on behalf of Bank, opened an asset management account with defendant Investment, which is a limited partnership organized under New Jersey law and has its principal place of business in New Jersey. Dillon and Hatton informed the Advisory Committee that the trust's portfolio would be "following a balanced objective whereby the portfolio should grow over time and generate some current income with a moderate amount of risk."

By 2001, the portfolio suffered a precipitous decline in value. The record contains a letter from Dillon and Hatton to the Advisory Committee which confirmed that the account had suffered a 15.1% decline in value since Investment took over its management; the letter also indicated that Investment's asset allocation for the trust had been 65% in equities and 35% in fixed-income securities. The record before us contains a Merrill Lynch investment guideline, under which a portfolio managed with an eye to a moderate amount of risk would have 50% of its assets in bonds, 10% in cash and only 40% in stocks.

The Advisory Committee and defendants Bank and Investment engaged in a course of e-mails, exchanging their respective views on the situation. The record before us, by way of example, contains an e-mail from the Committee to Bank and Investment outlining its concerns.

We hope that we made our main point very clear: the fund was set up to take care of Alberto Edelman and his family. Doctor Edelman is a paranoid schizophrenic whose illness is kept under control through medication but who may necessitate hospitalization from time to time. He will never be able to work or manage his own affairs adequately. His wife also has a history of schizophrenia; and although she is able to function more normally, she also is in treatment. There are two children aged 10 and 7. From the very beginning, it was intended that the fund should be managed conservatively, i.e. with minimum risk investments, so as to ensure that there would always be sufficient funds for the family's needs. . . .

When the letter of intent was drawn up and signed by Alberto's mother, there was, as she says, sufficient local income to cover all his living expenses. She contemplated withdrawals from the fund to cover extra expenses he might have, plus the cost of any extra medical treatment he might need. She hoped that he would not have to withdraw the total amount of interest earned, nor touch capital except in case of emergency. Her hope was that in this way her grandchildren would eventually receive a sum more or less equivalent to the initial capital of the Fund adjusted for inflation. The Fund was set up because she knew that neither Alberto nor his wife would be capable of managing their money adequately. She also nominated an Advisory Committee who would inform the Trustees of Alberto's needs.

Due to the situation in Argentina of which we are sure you are aware, his local income has dwindled so much that it no longer covers his living expenses. As things are at present and in the foreseeable future, he will have to withdraw enough from the fund to cover his needs, which due to his illness can be considerable. . . .

We feel that at the moment, given the volatility of the markets in general and the precarious situation of Alberto's mental health in particular, plus the fact that we must not run the risk of his ever being left without funds, it would be safest to stick to your own suggestions for minimum risk investment . . . and invest 75% of the portfolio in Fixed Income, which would ensure that money is available for his immediate needs, without having to touch capital. We feel that you should only buy triple A bonds with a medium maturity and monitor their progress in order to avoid losses such as that incurred with World com.

The last two years have seen constant buying and selling of stocks, many of very high risk, some with spectacular losses . . . . We understand your wish to invest in such a way as to restore the fund to its original position, but we cannot afford any more risks at this time. Whoever manages the investments must be aware of the fact that there is a real, very vulnerable and helpless person for whom the trust was set up, who at present has very little other income. We think we should now concentrate on top quality, low risk investments of the remaining 25% while the other 75% produces enough interest on fixed bonds to provide what is needed.

In our opinion the remaining 25% of the Fund should be very conservative about investing. We may fail to make spectacular gains but we must guard against spectacular losses, which we cannot afford.

The Committee noted that in its view, not only had the trust assets been allocated too heavily on the side of equities but that the equities selected, which included internet stocks, had been inappropriate for a trust of this nature.

Eventually, when they were unable to come to agreement, litigation ensued. Plaintiffs, the beneficiaries of the trust, originally brought suit in New York. That action was dismissed in December 2004 on the basis of forum non conveniens. In September 2006, plaintiffs filed this action in New Jersey, seeking to recoup the more than one million dollars the trust had lost. Plaintiffs asserted claims under New Jersey's Prudent Investor Act, N.J.S.A. 3B:20-11.1; breach of fiduciary duty; gross negligence; breach of contract; and consumer fraud. Defendants, in lieu of filing an answer, filed motions to dismiss. Defendant Bank argued that plaintiffs' complaint against it should be dismissed for lack of jurisdiction. It stressed that it was organized in the Cayman Islands and conducted business only in the Cayman Islands and the Isle of Man. It asserted it did no business in New Jersey and had never solicited business in New Jersey.

Both defendant Bank and defendant Investment sought dismissal on the basis of forum non conveniens, urging that New Jersey had no interest in having its courts and judicial system resolve this dispute.

Plaintiffs opposed the motions, contending that by engaging Investment, defendant Bank had purposely availed itself of New Jersey. Plaintiffs contended that since the particular investment decisions were made there, New Jersey was the most logical site to litigate the parties' dispute. Plaintiffs also stressed that they had not had any opportunity to engage in discovery, to explore the nature of the relationship between the two defendants and what led to the change in investment strategy.

After the conclusion of argument, the trial court placed an extensive oral opinion on the record, setting forth its reasons for concluding that it lacked jurisdiction over defendant Bank and that even if it did have jurisdiction, plaintiffs' complaint should be dismissed for forum non conveniens. The trial court also concluded that the complaint should be dismissed against Investment because Bank was an indispensable party and, finally, that the complaint should be dismissed because it failed to state a claim. Plaintiffs have appealed from the trial court orders granting defendants' motions.

I

A defendant may move to dismiss the complaint against it on the ground of "lack of jurisdiction over the person . . . ." R. 4:6-2(b). Appellate review of a ruling on jurisdiction is "plenary" because the question of personal jurisdiction is a question of law. Vetrotex CertainTeed Corp. v. Consol. Fiber Glass Prods. Co., 75 F.3d 147, 150 (3d Cir. 1996). Our review is thus de novo, while our review of the "court's factual findings with respect to jurisdiction" is only to determine if those findings are "supported by substantial, credible evidence under the standards set forth in Rova Farms[.]" Mastondrea v. Occidental Hotels Management S.A., 391 N.J. Super. 261, 268 (App. Div. 2007) (citing Rova Farms Resort, Inc. v. Investors Ins. Co., 65 N.J. 474, 484 (1974)).

Personal jurisdiction is "a mixed question of law and fact" that must be resolved at the outset, "before the matter may proceed . . . ." Citibank, N.A. v. Estate of Simpson, 290 N.J. Super. 519, 532 (App. Div. 1996). Presented with a motion to dismiss on the basis of lack of jurisdiction, a trial court must make findings of the "jurisdictional facts," because disputed "[j]urisdictional allegations cannot be accepted on their face . . . ." Id. at 531-32.

If the pleadings and certifications submitted to the trial court do not permit resolution of the jurisdictional question, the trial court must conduct a "preliminary evidential hearing after affording the parties an appropriate opportunity for discovery." Id. at 532. "When a motion to dismiss for lack of jurisdiction is made, it is only the jurisdictional allegations that are relevant, not the sufficiency of the allegations respecting the cause of action." Ibid.

New Jersey's "long-arm rule" permits personal jurisdiction to be established over nonresidents by service of a summons and complaint in whatever manner "due process of law" permits. R. 4:4-4(a)(6), (b)(1); Avdel Corp. v. Mecure, 58 N.J. 264, 268 (1971). Our courts "will allow out-of-state service to the uttermost limits permitted by the United States Constitution." Ibid. A defendant must have sufficient contact with the forum state "to make it reasonable and just according to our traditional conception of fair play and substantial justice to permit the state to enforce the obligations which appellant has incurred there." Int'l Shoe Co. v. Washington, 326 U.S. 310, 320, 66 S. Ct. 154, 160, 90 L. Ed. 95, 104 (1945).

The test for whether the defendant has created a "substantial connection" with the forum is whether the defendant "'deliberately' has engaged in significant activities within" the forum or has created "'continuing obligations' between himself and the residents of the forum," rather than contacts that are merely "'random,' 'fortuitous,' or "'attenuated' . . . ." Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475-76, 105 S. Ct. 2174, 2183-84, 85 L. Ed. 2d 528, 542-43 (1985) (citations omitted). There must "be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws." Hanson v. Denckla, 357 U.S. 235, 253, 78 S. Ct. 1228, 1240, 2 L. Ed. 2d 1283, 1298 (1958).

Plaintiff "bears the burden of proof on the question of the adequacy of the . . . defendants' contacts to sustain an exercise of specific jurisdiction." Citibank, supra, 290 N.J. Super. at 533. A court should only expect a prima facie showing of sufficient contacts "[i]n the early stages of a proceeding . . . ." Jacobs v. Walt Disney World Co., 309 N.J. Super. 443, 454 (App. Div. 1998). A conclusion of specific jurisdiction requires that the "purposeful acts by the [defendant] directed toward this State" be of a kind that "make[s] it reasonable for the [defendant] to anticipate being haled into court here." Mastondrea, supra, 391 N.J. Super. at 268.

Specific jurisdiction is not established simply through a communication with a person or entity in the forum state. The "nature of the contact" is critical to the analysis--namely that the defendant "merchant uses the instrumentalities of commerce to tap an interstate market for its product . . . ." Lebel v. Everglades Marina, Inc., 115 N.J. 317, 325 (1989). In Lebel, a Florida resident sold to a New Jersey resident a "high-speed, luxury racing boat," following negotiations that made clear the buyer's intent to use the boat in New Jersey. Id. at 320. The defendant was necessarily "well aware that this sale would have direct consequences in New Jersey" and thus "should have been aware" of the possibility of litigation arising here. Id. at 328. Similarly, a contract under which a nonresident has a New Jersey resident manufacture a product specially designed to meet the buyer's needs establishes sufficient contacts, while a contract for a nonresident to purchase "a mass-produced commodity from a New Jersey producer" does not. Bayway Refining Co. v. State Utils., Inc., 333 N.J. Super. 420, 435-38 (App. Div.), certif. denied, 165 N.J. 605 (2000).

We are satisfied that the record in the present matter was not sufficiently developed for the trial court to conclude, as it did, that Investment necessarily played only a ministerial role and could not be deemed Bank's agent for jurisdictional purposes. A fair reading of the correspondence in the record would support an inference that defendant Bank believed that defendant Investment was "managing" the trust account, subject only to broadly stated instructions and modest oversight.

The trial court concluded that Investment's "advisory services" were limited to the selection of particular investments. A close reading of the certifications submitted by defendants does not, in our judgment, warrant such a finding at this early stage. Selection of particular investments as appropriate vehicles to construct a balanced portfolio is not merely a clerical activity, moreover. It involves professional skills, analysis and judgment.

E-mail correspondence in the record demonstrates that Investment played a significant role in selecting particular investments to achieve the general investment objectives of the trust, as well as justifying those selections and the investment objectives to the Advisory Committee when it expressed concerns.

The record contains no indication that the Trust Manager who preceded Dillon and Hatton required the services of an investment advisor such as defendant Investment, and defendants have not pointed to events or circumstances which might have created a need for such trust managers to seek assistance. Nor did the assurances of Dillon and Hatton to the Committee that they would be monitoring Investment indicate that defendant Bank would be directing the investment decisions, leaving it only to Investment to implement them.

Defendant Bank could be seen as having initiated or permitted the development of a contractual relationship between itself and Investment under which Investment provided customized services of selecting investments that conformed to the investment objectives of this particular trust and then undertook to explain and justify those decisions to the Committee. The record permits the reasonable inference that defendant Bank turned to defendant Investment for professional advice on maintaining or developing investment strategies for this trust.

Defendant Bank's decision to have such a contractual relationship with defendant Investment could well have amounted to a "purposeful availment" of this forum and thus have created sufficient minimum contacts to warrant jurisdiction over Bank. On that basis, it could be concluded that defendant Bank should have known that Investment's management of the trust account might cause a claim about the account to be litigated where Investment resided.

We are satisfied that because the record presented to the court would support such inferences, the trial court should have permitted plaintiffs an opportunity for jurisdictional discovery. Although such discovery may result in a determination that New Jersey does not have jurisdiction, plaintiffs should not be deprived at this juncture from attempting to establish a sufficient basis to proceed. Because we have concluded that the trial court's conclusion that it did not have jurisdiction over defendant Bank must be reversed, we need not address its further conclusion that the complaint against Investment should be dismissed because Bank is an indispensable party.

II

The trial court also concluded that plaintiffs' complaint should be dismissed on grounds of forum non conveniens. The doctrine of forum non conveniens "is firmly embedded in the law of this State . . . ." D'Agostino v. Johnson & Johnson, Inc., 225 N.J. Super. 250, 258 (App. Div. 1988), aff'd, 115 N.J. 491 (1989). It allows a court to "decline jurisdiction whenever the ends of justice indicate a trial in the forum selected by the plaintiff would be inappropriate." Id. at 259. It is an equitable doctrine, reviewable for an abuse of discretion on the part of the trial court. Kurzke v. Nissan Motor Corp. in U.S.A., 164 N.J. 159, 165 (2000).

"The doctrine presupposes at least two forums in which the defendant is amenable to process and furnishes criteria for a choice between such forums." Wangler v. Harvey, 41 N.J. 277, 286 (1963). "[T]he necessary predicate to application of the doctrine is the existence of another forum where trial will best serve the convenience of the parties and the ends of justice." D'Agostino, supra, 225 N.J. Super. at 259.

"[T]he central focus of the forum non conveniens inquiry is convenience," and "dismissal will ordinarily be appropriate where trial in the plaintiff's chosen forum imposes a heavy burden on the defendant or the court, and where the plaintiff is unable to offer any specific reasons of convenience supporting his choice." Piper Aircraft Co. v. Reyno, 454 U.S. 235, 249, 102 S. Ct. 252, 262, 70 L. Ed. 2d 419, 431 (1981). The doctrine addresses the needs of both sides, because while it "is principally concerned with preventing harassment and vexation to the defendant" that "'seriously inconvenience[s]'" the defendant's ability to litigate in the chosen forum, "'it must also appear that a transfer will not result in significant hardship to the plaintiffs.'" Wangler, supra, 41 N.J. at 286 (quoting Starr v. Berry, 25 N.J. 573, 587 (1957)).

A determination of a question of forum non conveniens should be guided by analyzing the applicable private interest and public interest factors. Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508-09, 67 S. Ct. 839, 843, 91 L. Ed. 1055, 1062-63 (1947); Gore v. U.S. Steel Corp., 15 N.J. 301, 305-12, cert. denied, 348 U.S. 861, 75 S. Ct. 84, 99 L. Ed. 678 (1954). These factors provide "an analytical framework," not a mechanical balancing test. Madan-Russo v. Grupo Posada, S.A. de V.C., 366 N.J. Super. 420, 426-27 (App. Div.), certif. denied, 180 N.J. 448 (2004).

The private interest factors are:

(1) the relative ease of access to sources of proof, (2) the availability of compulsory process for attendance of unwilling witnesses and the cost of obtaining the attendance of willing witnesses, (3) whether a view of the premises is appropriate to the action and (4) all other practical problems that make trial of a case "easy, expeditious and inexpensive," including the enforceability of the ultimate judgment.

[D'Agostino, supra, 225 N.J. Super. at 263.]

Here, the trial court relied on the presumed inability to compel the attendance of Bank's employees in New Jersey. That, however, is a problem for plaintiffs, not for defendants and plaintiffs have implicitly waived that problem by commencing the action here. The trial court, moreover, did not consider whether it could compel the appearance of Bank's employees in the Cayman Islands or the Isle of Man for depositions de bene esse that would memorialize their testimony for trial here. Genovese v. N.J. Transit Rail Operations, Inc., 234 N.J. Super. 375, 380 (App. Div.), certif. denied, 118 N.J. 196 (1989) (defining such depositions).

The trial court, moreover, characterized access to Investment's records and witnesses as "immaterial." This, however, was premised on its view that Investment's actions with respect to this trust account were merely clerical and ministerial. But, as we have noted above, such a characterization was premature.

The gravamen of the public-interest factors is "the existence of a factual nexus between the issues in the litigation and the forum selected by the plaintiff." D'Agostino, supra, 115 N.J. at 495-97. Whether there is a nexus is primarily based upon the facts of the case, not on whether there is a greater degree of support for the plaintiff's claim under the forum's law than under the law of the alternate forum. Id. at 495-96.

On the sparse record that exists so far, it is inferable that Investment's role in managing this trust account may have represented a degree of professional discretion and fiduciary responsibility that New Jersey would have an interest in monitoring. Those circumstances would represent a factual nexus between plaintiff's claims against defendant Bank and this forum.

There is a "strong presumption" to retain jurisdiction "when the plaintiff has chosen his or her home forum." Madan-Russo, supra, 366 N.J. Super. at 426. The plaintiff's choice "may be overcome only when the private and public interest factors clearly point towards trial in the alternative forum." Piper, supra, 454 U.S. at 255, 102 S. Ct. at 266, 70 L. Ed. 2d at 435. Dismissal for forum non conveniens should be granted only when the defendant shows that the plaintiff's choice of forum is "demonstrably inappropriate." D'Agostino, supra, 225 N.J. Super. at 262 (citation omitted).

The presumption in favor of the plaintiff's chosen forum carries less weight when the plaintiff is a stranger to the chosen forum. Piper, supra, 454 U.S. at 255-56, 102 S. Ct. at 266, 70 L. Ed. 2d at 434-35. Even for nonresident plaintiffs, however, "'only in those exceptional cases where a weighing of all of the many relevant factors, of which residence is but part, decisively establishes that there is available another forum where trial will best serve the convenience of the parties and the ends of justice,'" is forum non conveniens "'ever invoked.'" D'Agostino, supra, 225 N.J. Super. at 262-63 (quoting Gore, supra, 15 N.J. at 311).

Our Supreme Court has long recognized that the decision on forum non conveniens is better made when it is "reserved until discovery has proceeded sufficiently to enable the court to make a better-informed assessment of the private- and public-interest factors." D'Agostino, supra, 115 N.J. at 494 n.1. "Although the factors set forth in Gulf Oil are of central importance, pre-discovery is ordinarily an inappropriate point in the litigation at which to consider them." Kurzke, supra, 164 N.J. at 172.

Thus the Court has said that "[a]s a general rule, a motion for dismissal due to forum non conveniens should not be heard unless the movant has made a good faith effort to obtain discovery and can provide the court with a record verifying that discovery is unreasonably inadequate for litigating in the forum chosen by the plaintiff." Id. at 168. "Mere speculation about potential inadequacies ordinarily is not a sufficient basis to deny the plaintiff the choice of forum." Ibid.

As with the motion based upon lack of jurisdiction, we conclude that the record presented to the court did not warrant the dismissal for forum non conveniens. Defendants did not give the court a sufficient basis to determine whether they did in fact face "serious burdens" if they were compelled to litigate this matter in our courts.

III

The final reason given by the trial court to dismiss this matter was its conclusion that plaintiffs' complaint failed to state a claim. The basis for the trial court's conclusion was its view that Cayman Island law necessarily governed all aspects of this dispute.

On a motion to dismiss for failure to state a claim under Rule 4:6-2, the trial court must search the complaint "in depth and with liberality to ascertain whether the fundament of a cause of action may be gleaned even from an obscure statement of claim, opportunity being given to amend if necessary." Printing Mart-Morristown v. Sharp Elecs. Corp., 116 N.J. 739, 746 (1989) (citation omitted). The court's task is "to ascertain the suggestion of a cause of action that could be fleshed out with further discovery . . . ." Banco Popular N. Am. v. Gandi, 184 N.J. 161, 184 (2005). Motions to dismiss for failure to state a claim are "granted in only the rarest [of] instances." Id. at 165 (citation omitted).

When a motion to dismiss for failure to state a claim is considered before discovery, "[i]t is the existence of the fundament of a cause of action . . . that is pivotal," and "the ability of the plaintiff to prove its allegations is not at issue." Id. at 183. "The issue [is] not whether the [plaintiff's] allegations [are] true or whether they could be proved, but only whether they were made." Ibid.

The same factors which led us to conclude that the trial court prematurely decided the questions of jurisdiction and forum non conveniens lead us also to conclude that it was similarly premature in deciding whether plaintiffs' complaint stated a claim. The question of which law applied to this controversy involved a complex analysis of a variety of competing factors. The terms of the trust agreement were not necessarily dispositive, particularly with respect to defendant Investment, which was not a party to the trust agreement.

Nothing within this opinion forecasts any views on the merits of plaintiffs' claims against these defendants nor on the question whether defendants may be entitled to prevail on these issues after a fuller record is developed and presented to the trial court. We say no more than that the issues were not fully ripe for decision.

 
The orders under review are reversed, and the matter is remanded to the trial court for further proceedings. We do not retain jurisdiction.

Misnamed below as "Albert."

(continued)

(continued)

24

A-4529-06T3

February 24, 2009