VEDICSOFT SOLUTIONS INC v. MILLENNIUM CONSULTING INC

 
(NOTE: The status of this decision is Published.)

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

 

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-2367-09T3

VEDICSOFT SOLUTIONS, INC.,

Plaintiff-Appellant,

v.

MILLENNIUM CONSULTING, INC.,

Defendant-Respondent.

_______________________________________

October 22, 2010

 

Argued September 28, 2010 Decided

 

Before Judges Parrillo and Yannotti.

 

On appeal from the Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-7755-09.

 

Michael R. Olszak argued the cause for appellant (Herten, Burstein, Sheridan, Cevasco, Bottinelli, Litt & Harz, L.L.C., attorneys; Patrick Papalia, of counsel; Mr. Olszak, on the brief).

 

Edward J. Nolan argued the cause for respondent (Law Offices of Edward J. Nolan, attorneys; Mr. Nolan, of counsel and on the brief).

PER CURIAM

Plaintiff Vedicsoft Solutions, Inc. (Vedicsoft) appeals from an order entered by the Law Division on December 10, 2009, dismissing its complaint against defendant Millennium Consulting, Inc. (Millennium) for lack of personal jurisdiction. We reverse.

I.

Vedicsoft is a New Jersey corporation with its principal place of business in Iselin, New Jersey. Vedicsoft is an information technology (IT) consulting firm, which employs IT consultants to be placed either directly or indirectly at client sites throughout the United States. Vedicsoft's employees are paid their salaries through Vedicsoft's New Jersey office.

Millennium is a Rhode Island corporation with its principal place of business in Wakefield, Rhode Island. Millennium is in the business of technology consulting, recruiting and staffing. Millennium's business includes the provision of the services of IT professionals to its clients on a temporary or project basis.

In 2005, Millennium placed certain advertisements on various internet job search websites seeking IT consultants to work on various projects for its clients. Millennium's job search postings typically describe the available job, its location and its requirements. Vedicsoft responded to Millennium's job postings and indicated that it had IT consultants who could fill the positions.

On October 11, 2005, Vedicsoft and Millennium entered into an Independent Contract Agreement (Agreement), whereby Vedicsoft agreed to supply IT consultants to work as Millennium subcontractors on various projects for Millennium's clients. The Agreement stated, among other things, that it "shall be governed by and construed in accordance with the laws of the State of Rhode Island and Providence Plantations, without giving effect to any principles of conflicts of laws."

Thereafter, in furtherance of the Agreement, Millennium and Vedicsoft executed a purchase order whenever a Vedicsoft IT consultant was placed on a specific Millennium project. Upon the performance of the services, Vedicsoft sent an invoice to Millennium, which remitted payment to Vedicsoft in New Jersey.

In the course of their contractual relationship, which extended over a four-year period, Millennium placed four Vedicsoft consultants with its clients three at a job in Rhode Island and one at a job in Massachusetts. Millennium paid Vedicsoft $857,476.00 for the services. Vedicsoft claims that Millennium owes it $35,936.50 for services provided by its consultants. Millennium disputes the claim, asserting that the amount sought by Vedicsoft is approximately twice the amount that may be due.

On September 4, 2009, Vedicsoft filed a complaint against Millennium in the Law Division seeking the monies allegedly due to it under the Agreement. On October 5, 2009, Millennium filed suit against Vedicsoft in the Rhode Island Superior Court, in which it asserted a claim for breach of contract and sought injunctive relief and damages.

On November 4, 2009, Millennium filed a motion in the Law Division to dismiss the complaint pursuant to Rule 4:6-2 for lack of personal jurisdiction. In support of its motion, Millennium submitted a certification of Charles Kyle Van Brocklin (Van Brocklin), its Chief Financial Officer.

In his certification, Van Brocklin asserted that after Vedicsoft responded to Millennium's internet job advertisements, the parties exchanged electronic mail messages and communicated through the mail and telephone prior to executing the Agreement and one or more of the purchase orders.

Van Brocklin stated that none of Millennium's officers, agents or employees entered New Jersey in connection with the execution or performance of the Agreement, and Millennium never engaged Vedicsoft or any of its employees or agents to perform any services in New Jersey. In addition, Van Brocklin asserted that the services at issue were performed on site for Millennium's clients in Rhode Island and Massachusetts.

Vedicsoft opposed Millennium's motion and submitted a certification from Sonia Minhas (Minhas), the Director of Operations. In her certification, Minhas stated, among other things, that all of the communications between the parties regarding the Agreement took place through Vedicsoft's New Jersey office.

Minhas said that when the parties entered the Agreement, Millennium was aware that Vedicsoft was a New Jersey company. Minhas stated that Millennium knew the consultants that Vedicsoft furnished to it were New Jersey employees. Minhas added that, while the services of its consultants were rendered in Rhode Island and Massachusetts, the consultants remained its employees in New Jersey and were considered "New Jersey W-2 employees."

The trial court filed an order dated December 10, 2009, granting Millennium's motion to dismiss the complaint for the reasons stated in a rider appended to the order. In the rider, the court stated that it lacked general or specific jurisdiction over Millennium. This appeal followed.

Vedicsoft argues that the trial court erred because contrary to the court's finding, New Jersey has specific jurisdiction over Millennium with regard to the claims asserted in its complaint. Vedicsoft further argues that the exercise by New Jersey of jurisdiction in this case does not violate notions of fair play and substantial justice and the fact that Millennium has no physical presence in New Jersey is not determinative of the jurisdictional issue. In addition, Vedicsoft argues that the trial court erred by finding New Jersey could not exercise general jurisdiction over Millennium and it should have been afforded the opportunity for discovery on this jurisdictional issue.

II.

We note initially that the trial court did not entertain oral argument on Millennium's motion before entering the December 10, 2009 order dismissing Vedicsoft's complaint. Rule 1:6-2(d) provides that, with certain exceptions, requests for oral argument on motions in civil and family actions "shall be granted as of right."

In Great Atl. & Pac. Tea v. Checchio, 335 N.J. Super. 495 (App. Div. 2000), we found that the trial court erred by deciding a motion for summary judgment without entertaining oral argument. Id. at 497-98. We noted that Rule 1:6-2(d) required oral argument on the motion and the record disclosed no basis for relaxation of the rule. Ibid. We also pointed out that oral argument of the appeal had confirmed the value of having both sides explain their respective positions so that they could be "properly understood." Id. at 498.

Here, Millennium made a timely request for oral argument on its motion. It stated in its notice of motion that it was seeking oral argument in the event the motion was opposed. As noted, Vedicsoft opposed the motion. Although there was not a significant disagreement as to the relevant facts, the parties clearly differed as to the legal significance of those facts. We are convinced that, under the circumstances, the trial court erred by failing to grant Millennium's request for oral argument. However, since the matter involves what is essentially a legal issue that has now been fully briefed and argued, we will consider the merits of the appeal.

III.

Vedicsoft argues that the trial court erred by finding it could not exercise specific jurisdiction over Millennium. We agree.

Due process requires that, in order for a forum state to exercise personal jurisdiction over a defendant, the defendant must have minimum contacts with the forum such that maintenance of the lawsuit "does not offend 'traditional notions of fair play and substantial justice.'" Int'l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S. Ct. 154, 158, 90 L. Ed. 95, 102 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463, 61 S. Ct. 339, 343, 85 L. Ed. 278, 283 (1940)). "When a State exercises personal jurisdiction over a defendant in a suit not arising out of or related to the defendant's contacts with the forum, the State has been said to be exercising 'general jurisdiction' over the defendant." Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 n.9, 104 S. Ct. 1868, 1872 n.9, 80 L. Ed. 2d 404, 411 n.9 (1984).

However, when a state exercises personal jurisdiction over a defendant in a suit that arises out of the defendant's contact with that state, it is said to be exercising specific jurisdiction. Id. at 414 n.8, 104 S. Ct. at 1872 n.8, 80 L. Ed. 2d at 411 n.8. In such a case, the minimum contacts inquiry focuses upon "'the relationship among the defendant, the forum, and the litigation.'" Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 775, 104 S. Ct. 1473, 1478, 79 L. Ed. 2d 790, 798 (1984) (quoting Shaffer v. Heitner, 433 U.S. 186, 204, 97 S. Ct. 2569, 2580, 53 L. Ed. 2d 683, 698 (1977)). "The 'minimum contacts' requirement is satisfied so long as the contacts resulted from the defendant's purposeful conduct and not the unilateral activities of the plaintiff." Lebel v. Everglades Marina, Inc., 115 N.J. 317, 323 (1989) (citing World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297-98, 100 S. Ct. 559, 567-68, 62 L. Ed. 2d 490, 501-02 (1980)).

A state may not exercise jurisdiction over a defendant as a result of contacts that are "random," "fortuitous" or "attenuated." Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475, 105 S. Ct. 2174, 2183, 85 L. Ed. 2d 528, 542 (1985) (quoting Keeton, supra, 465 U.S. at 774, 104 S. Ct. at 1478, 79 L. Ed. 2d at 797; World-Wide Volkswagen, supra, 444 U.S. at 299, 100 S. Ct. at 568, 62 L. Ed. 2d at 502). "The question is whether 'the defendant's conduct and connection with the forum State are such that [the defendant] should reasonably anticipate being haled into court there.'" Lebel, supra, 115 N.J. at 324 (quoting World-Wide Volkswagen, supra, 444 U.S. at 297, 100 S. Ct. at 567, 62 L. Ed. 2d at 501).

Here, Millennium (1) negotiated a contract with Vedicsoft for the provision of consulting services to Millennium's clients; (2) executed the contract and forwarded the agreement to Vedicsoft in New Jersey so that Vedicsoft could execute it; (3) communicated at various times with Vedicsoft over a four-year period through electronic mail, telephone and the U.S. mail in furtherance of the contractual relationship; (4) employed the services of Vedicsoft's New Jersey employees over a four-year period; (5) remitted payment at various times to Vedicsoft in New Jersey; and (6) engaged in an ongoing contractual relationship with Vedicsoft, a New Jersey corporation.

Millennium's contacts with New Jersey were not the result of Vedicsoft's unilateral activities. As we have explained, after Vedicsoft responded to Millennium's internet job postings, Millennium contacted Vedicsoft to establish the contractual relationship. It executed the agreement, issued purchase orders for the specific services of Vedicsoft's New Jersey employees, periodically contacted Vedicsoft in New Jersey and remitted payments to Vedicsoft in New Jersey for the services of its New Jersey workers. Millennium's contacts with this State were purposeful. They were not random, fortuitous or attenuated.

Moreover, the fact that Millennium and its employees did not have any physical contact with New Jersey does not preclude the exercise of jurisdiction in this case. "'[I]t is an inescapable fact of modern commercial life that a substantial amount of business is transacted solely by mail and wire communications across state lines, thus obviating the need for physical presence within a State in which business is conducted.'" Lebel, supra, 115 N.J. at 328 (quoting Burger King, supra, 471 U.S. at 476, 105 S. Ct. at 2184, 85 L. Ed. 2d at 543).

Indeed, a defendant's lack of physical contacts with a forum state will not defeat the exercise of personal jurisdiction if the defendant's efforts are "purposefully directed" towards the residents of the forum. Ibid. (quoting Burger King, supra, 471 U.S. at 476, 105 S. Ct. at 2184, 85 L. Ed. 2d at 543). Here, Millennium's efforts to establish a contractual relationship were purposefully directed at Vedicsoft and the New Jersey-based employees assigned to provide services for Millennium's clients.

Millennium maintains, however, that the requisite minimum contacts are lacking here because its internet job posting was not specifically directed at New Jersey. Although Millennium's posting on the internet was not directed at New Jersey, Millennium contacted Vedicsoft after Vedicsoft responded to the job posting. At that point, Millennium sought out Vedicsoft in New Jersey in order to establish a business relationship.

Because Millennium engaged in sufficient contacts with New Jersey for the exercise of specific jurisdiction, we must determine whether the exercise of such jurisdiction would "offend 'traditional notions of fair play and substantial justice.'" Int'l Shoe Co., supra, 326 U.S. at 316, 66 S. Ct. at 158, 90 L. Ed. at 102 (quoting Milliken, supra, 311 U.S. at 463, 61 S. Ct. at 343, 85 L. Ed. at 283). In making this determination, we consider the burden on defendant, New Jersey's interest in the matter, plaintiff's interest in obtaining relief on its claims, the interstate justice system's interest in having the matter resolved in the most efficient manner, and the states' interest in furthering social policies. Lebel, supra, 115 N.J. at 328 (citing Asahi Metal Indus. Co. v. Superior Court of Cal., 480 U.S. 102, 113, 107 S. Ct. 1026, 1034, 94 L. Ed. 2d 92, 105 (1987)).

It may be more burdensome for Millennium to litigate this dispute in New Jersey rather than Rhode Island; however, the additional burden is slight and "a slight imbalance will not defeat jurisdiction." Id. at 328-29. Furthermore, Millennium has not established that it will be unable to present any evidence in New Jersey that might be available in Rhode Island. In addition, New Jersey has a strong interest in protecting New Jersey creditors, and litigation of this dispute here will not be less efficient than having the matter litigated elsewhere. We accordingly conclude that it would not offend notions of fair play and substantial justice if New Jersey exercises jurisdiction in this case.

In urging affirmance of the trial court's order, Millennium relies upon J. I. Kislak, Inc. v. Trumball Shopping Park, Inc., 150 N.J. Super. 96 (App. Div. 1977). In J. I. Kislak, the plaintiff, a New Jersey corporation, was retained by the defendant, a Delaware corporation with its principal place of business in Connecticut, to act as its exclusive rental agent for stores in the defendant's shopping center in Connecticut. Id. at 99. The parties executed the contract in Connecticut. Ibid. It provided that any dispute arising thereunder would be litigated in the Connecticut courts. Ibid.

The defendant in J. I. Kislak never entered New Jersey in connection with the execution or performance of the agreement, and the defendant had no contact with New Jersey "through the conduct of any type of business [in this State] or through the possession or ownership of any real estate, offices, places of business or the presence of personnel or representatives." Ibid. In addition, all meetings between the plaintiff's representatives and prospective tenants took place in Connecticut or New York, although the plaintiff did contact prospective tenants from its New Jersey office. Id. at 100.

In J. I. Kislak, we held that the defendant's contacts with New Jersey were insufficient to allow the New Jersey courts to exercise personal jurisdiction over the defendant. Id. at 102-03. We observed that the plaintiff had become the defendant's exclusive agent by soliciting the defendant in Connecticut. Id. at 102. We also observed that, although the plaintiff had engaged in some solicitation of prospective tenants from its New Jersey office, this was "too slim a reed to support the conclusion that [the] defendant by its mere execution of the contract caused significant effects in this State." Ibid.

In our judgment, Millennium's reliance upon the J. I. Kislak case is misplaced. Here, the initial solicitation was made by Millennium by its internet job posting. Millennium could reasonably expect that its job posting could generate a response from an entity in a state in relatively close proximity to Rhode Island where Millennium has its principal place of business. Furthermore, Vedicsoft executed the agreement in New Jersey, after the parties communicated by means of electronic mail, phone and the U.S. mail. The parties engaged in business over a four-year period. Their contractual relationship involved the provision of Vedicsoft's New Jersey based workers to provide services to Millennium's clients in other states. Millennium's contacts with New Jersey are far more extensive than those of the defendant in J. I. Kislak.

Millennium also relies upon Pfundstein v. Omnicom Group, Inc., 285 N.J. Super. 245 (App. Div. 1995). In that case, the plaintiff, a resident of New Jersey, entered into an employment contract with a New York corporation, which later merged with other corporations to form the defendant. Id. at 248. The agreement was negotiated and executed in New York. Ibid. The agreement contained a New York choice-of-law provision. Ibid.

One year after the plaintiff entered into the employment contract, the parties executed a severance agreement, which was also negotiated in New York. Ibid. The severance agreement included a New York choice-of-law provision. Ibid. The plaintiff apparently signed the severance agreement at his home in New Jersey. Ibid.

The plaintiff thereafter brought suit against the defendant, claiming the defendant had breached the severance agreement because it misrepresented to the plaintiff that he would receive the same severance payments as those paid to similarly-situated executives. Id. at 249. We held that the defendant did not have sufficient contacts with New Jersey to support the exercise of personal jurisdiction over the defendant. Id. at 250-52.

Regarding specific jurisdiction, we observed that the defendant's only contacts with New Jersey were certain interstate phone and mail communications. Id. at 251. We concluded that those limited contacts did not establish that the defendant had "purposefully availed itself of the privilege of conducting activities" in New Jersey. Ibid.

Millennium's reliance on Pfundstein is unavailing. There, the defendant's only contacts with New Jersey were by phone and mail communications. Here, Millennium did more than simply communicate with Vedicsoft by mail, phone and electronic communications. As we pointed out previously, Millennium entered into an ongoing business relationship with a New Jersey company that lasted over a four-year period. Unlike the situation in Pfundstein, Millennium could reasonably anticipate that it might be haled into a New Jersey court to litigate a claim for monies due under the contract.

Millennium additionally relies upon Bayway Refining Co. v. State Utils., Inc., 333 N.J. Super. 420 (App. Div.), certif. denied, 165 N.J. 605 (2000). The Bayway case concerned a dispute between the plaintiff, a New Jersey manufacturer of petroleum products, and a New York corporation that purchased fuel oil from the plaintiff. Id. at 425. The plaintiff solicited the defendant's business and the defendant entered into a contract to purchase fuel oil from the plaintiff. Id. at 426.

The defendant purchased fuel oil over a four-year period with purchase orders made through one of plaintiff's employees at its fuel terminal in New York. Id. at 426-27. The defendant picked up the fuel at the plaintiff's New York terminal. Id. at 428. The defendant paid for the fuel by check or electronic transfer to the plaintiff's bank. Id. at 427.

We held that the defendant's contacts with New Jersey were insufficient to warrant the exercise by New Jersey of jurisdiction in the dispute over monies allegedly due to the plaintiff for the fuel oil purchases. Id. at 431. We stated that the defendant's role in the transactions at issue was that of a "passive buyer," who had engaged in a commercial transaction of the sort that occurs many times each day. Id. at 433-34.

We observed that the case involved the purchase of "a generic, mass-produced commodity for an agreed upon price at an agreed upon time." Id. at 434. We added that the evidence revealed

no intent on [the defendant's] part to do business in New Jersey, nor to benefit from its laws, nor to affect persons or events in New Jersey. The contract required no special undertaking by a New Jersey business. While [the] plaintiff did refine the oil at its Linden plant, it did not refine the oil according to any specific requirements imposed by [the defendant]. [The] [d]efendant's contacts with the New Jersey corporation took place almost exclusively through [the] plaintiff's marketing and sales representative based in New York.

 

[Id. at 436-37.]

The facts in this case are substantially different from those presented in Bayway. Here, the dispute does not arise from the commercial sale of a generic product. Rather, the matter involves the provision of personal services required by Millennium's clients for certain specific projects. Moreover, Millennium's contracts with Vedicsoft did not occur, as was the case in Bayway, exclusively with persons outside of New Jersey.

We accordingly conclude that the trial court erred by finding that New Jersey may not exercise personal jurisdiction over Millennium in this matter.

IV.

Vedicsoft also argues that the trial court erred by concluding that New Jersey did not have general jurisdiction over Millennium. Vedicsoft also contends that the trial court should have allowed discovery on this jurisdictional issue. Vedicsoft claims that such discovery may have revealed facts that would support the exercise by New Jersey of general jurisdiction over Millennium. In view of our determination that Millennium had sufficient minimum contacts with New Jersey to allow our courts to exercise specific jurisdiction in this case, we need not consider these contentions.

Reversed and remanded for further proceedings consistent with this opinion.