MAXIMUM QUALITY FOODS, INC v. PANKOS DINER CORP

NOT FOR PUBLICATION WITHOUT THE
                               APPROVAL OF THE APPELLATE DIVISION
        This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the
     internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.




                                                        SUPERIOR COURT OF NEW JERSEY
                                                        APPELLATE DIVISION
                                                        DOCKET NO. A-1007-19T2

MAXIMUM QUALITY
FOODS, INC.,

          Plaintiff-Appellant,

v.

PANKOS DINER CORP.
d/b/a EMPRESS DINER and
JERRY M. PANAGATOS,

     Defendants-Respondents.
____________________________

                   Submitted October 1, 2020 – Decided October 20, 2020

                   Before Judges Whipple and Firko.

                   On appeal from the Superior Court of New Jersey, Law
                   Division, Camden County, Docket No. L-0553-19.

                   Saldutti Law Group, attorneys for appellant (Andrew P.
                   Chigounis, on the briefs).

                   Jacobs, Schwalbe & Petruzzelli, PC, attorneys for
                   respondents (John Morelli, on the brief).

PER CURIAM
      In this collection case, plaintiff Maximum Quality Foods, Inc. (plaintiff)

appeals from an October 2, 2019 order granting summary judgment and

dismissing its complaint for lack of personal jurisdiction over defendants Pankos

Diner Corp. (Pankos) D/B/A Empress Diner and Jerry M. Panagatos

(Panagatos). For the reasons that follow, we affirm.

                                       I.

      We discern the following facts from the summary judgment record and

view them in the light most favorable to the non-moving party. See Brill v.

Guardian Life Ins. Co. of Am.,  142 N.J. 520, 523 (1995). Plaintiff is a New

Jersey corporation having a principal place of business in Linden that delivers

food products. According to plaintiff's website, it serves the New Jersey, New

York, Long Island, Pennsylvania, Delaware, New England, and other areas.

      Panagatos is a 37.5% shareholder and the president of Pankos, a New York

corporation, which is not authorized to conduct business in New Jersey. The

other shareholders are Panagatos's brother and mother.         Pankos formerly

operated the Empress Diner at 2490 Hempstead Turnpike in East Meadow, New

York, which closed on May 5, 2018. Panagatos resides in Melville, New York

and has never resided in New Jersey. He has not traveled to New Jersey in the

past five years except when passing through to another location.


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        Plaintiff and Empress entered into an agreement to purchase food products

from plaintiff. Defendants did not travel to New Jersey to execute any contracts.

When plaintiff delivered food products to the Empress Diner, orders were signed

for by the chef, Chris Kokinilas. Panagatos never personally signed for any

orders.    The record shows that plaintiff's sales personnel traveled to East

Meadow to take defendants' orders. The parties' business relationship continued

for a number of years.        According to Panagatos, he observed corporate

formalities and conducted business through the Pankos corporate name. He

never represented he would assume personal liability for Pankos's corporate

debt.

        On February 12, 2019, plaintiff filed a complaint in the Camden County 1

Law Division alleging breach of contract, breach of fiduciary duty/quasi-trust

relationship, alter-ego/piercing the corporate veil, unjust enrichment, and

promissory estoppel. Plaintiff sought $40,029.64 in monetary damages plus

$10,007.41 in counsel fees. Defendants defaulted, and on April 12, 2019, filed

a motion to vacate default and permit filing of an answer and separate defenses,

including lack of personal jurisdiction over defendants. The judge vacated the


1
   The record does not support plaintiff asserting venue in Camden County since
its principal place of business is in Linden, which is located in Union County.
However, that issue is not raised on appeal and is not germane to our decision.
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                                        3
default and permitted defendants to file an answer and separate defenses. Before

ruling on the issue of jurisdiction, the judge ordered the parties to conduct

discovery.

      On May 29, 2019, defendants filed an answer and separate defenses.

Thereafter, on June 17, 2019, plaintiff moved for partial summary judgment

against Pankos only. On July 18, 2019, defendants filed opposition to plaintiff's

motion and a cross-motion to dismiss the complaint. Defendants argued that

because Pankos is a New York corporation not authorized to conduct business

in the State of New Jersey, Panagatos is a New York resident with no ties to this

State, and all food orders and deliveries occurred at the Empress Diner in East

Meadow, there was no basis to find personal jurisdiction in New Jersey.

      On September 27, 2019, the Law Division judge heard oral argument and

placed her decision on the record. The judge denied plaintiff's motion, granted

defendants' cross-motion, and dismissed the complaint for lack of personal

jurisdiction over defendants.    In her decision, the judge found exercising

jurisdiction over defendants would offend "the traditional notions of fair play

and substantial justice." The judge stated:

             In determining whether a non-resident defendant is
             subject to our jurisdiction, it requires a two-prong
             analysis: [f]irst, an examination of the notice of the
             contacts defendant has had with the jurisdiction; and

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                                       4
              then a consideration whether the exercise of
              jurisdiction comports with fair play and substantial
              justice: that is, whether the exercise of jurisdiction
              would be reasonable in the overall context of the
              matter. Based upon the facts of this case, I can't come
              to that conclusion.

        In addition, the judge reasoned that jurisdiction lies in New York "where

[p]laintiff went to every week and took an order." The judge further found

defendants never placed orders in New Jersey and concluded "defendant[s]'

contacts with the State of New Jersey are insufficient to invoke . . . personal

jurisdiction." A memorializing order was entered on October 2, 2019. 2

                                        II.

        On appeal, plaintiff argues the judge erred by granting defendants' motion

for summary judgment and dismissing its complaint.             Plaintiff contends

defendants have established "minimum contacts" with the State of New Jersey

because defendants knowingly placed weekly orders for food deliveries with a

New Jersey company over the course of many years. Further, plaintiff asserts

that New Jersey courts maintain personal jurisdiction over defendants be cause

they knew plaintiff had its warehouse and offices situated in New Jersey,




2
    The judge denied plaintiff's additional claims as moot.
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                                         5
requested that products be transported to New York on New Jersey vehicles, and

defendants sent payment to New Jersey.

      "An appellate court reviews an order granting summary judgment in

accordance with the same standard as the motion judge." New Jersey Transit

Corp. v. Certain Underwriters at Lloyd's London,  461 N.J. Super. 440, 452 (App.

Div. 2019) (quoting Bhagat v. Bhagat,  217 N.J. 22, 38 (2014)). Rule 4:46-2(c)

provides that summary judgment shall be granted "if the pleadings, depositions,

answers to interrogatories and admissions on file, together with affidavits, if

any, show that there is no genuine issue as to any material fact challenged and

that the moving party is entitled to a judgment or order as a matter of law."

      "If there exists a single, unavoidable resolution of the alleged disputed

issue of fact, that issue should be considered insufficient to constitute a 'genuine'

issue of material fact for purposes of Rule 4:46-2." Brill,  142 N.J. at 540 (citing

Anderson v. Liberty Lobby, Inc.,  477 U.S. 242, 250 (1986)). The court "should

not hesitate to grant summary judgment" if "the evidence 'is so one-sided that

one party must prevail as a matter of law.'" Ibid. (quoting Liberty Lobby,  477 U.S. at 252).

      We review the trial court's grant of summary judgment de novo under the

same standard as the trial court. Templo Fuente De Vida Corp. v. Nat'l Union


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                                         6
Fire Ins. Co.,  224 N.J. 189, 199 (2016). Where there is no issue of material fact

and only a question of law remains, we give "no special deference to the legal

determinations of the trial court." Ibid. (citing Manalapan Realty, L.P. v. Twp.

Comm. of Manalapan,  140 N.J. 366, 378 (1995)).

      It has long been recognized that our state courts may exercise jurisdiction

over a non-resident defendant "to the uttermost limits permitted by the United

States Constitution." Avdel Corp. v. Mecure,  58 N.J. 264, 268 (1971); Nicastro

v. McIntyre Mach. Am., Ltd.,  201 N.J. 48, 72 (2010); see also R. 4:4-4.

      In the progression of personal jurisdiction cases decided by the United

States Supreme Court under the federal due process clause, two cardinal

principles have consistently applied, dating back to at least 1945 when the Court

decided International Shoe Co. v. Washington,  326 U.S. 310 (1945). First, "due

process requires only that in order to subject a defendant to a judgment in

personam, if he be not present within the territory of the forum, he have certain

minimum contacts with it[.]" Id. at 316. Second, the minimum contacts must

be of a nature and extent "such that the maintenance of the suit does not offend

'traditional notions of fair play and substantial justice.'" Ibid. (quoting Milliken

v. Meyer,  311 U.S. 457, 463 (1940)); see also Hanson v. Denckla,  357 U.S. 235

(1958); McGee v. Int'l Life Ins. Co.,  355 U.S. 220 (1957).


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      In the matter under review, plaintiff invokes a "specific" jurisdictional

nexus arising out of the subject matter rather than asserting that New Jersey has

"general" jurisdiction over defendants by virtue of any "'continuous and

substantial' contacts with the forum." Jacobs v. Walt Disney World Co.,  309 N.J. Super. 443, 452 (App. Div. 1998) (quoting Accura Zeisel Mach. Corp. v.

Timico, Inc.,  305 N.J. Super. 559, 565 (App. Div. 1997)).

      A "'minimum contacts inquiry must focus on the relationship among the

defendant, the forum, and the litigation.'" Bayway Ref. Co. v. State Utils., Inc.,

 333 N.J. Super. 420, 429 (App. Div. 2000) (quoting Lebel v. Everglades Marina,

Inc.,  115 N.J. 317, 323 (1989)).      "In determining whether the defendant's

contacts are purposeful, a court must examine the defendant's 'conduct and

connection' with the forum state and determine whether the defendant should

'reasonably anticipate being hauled into court [in the forum state].'"       Ibid.

(quoting World-Wide Volkswagen Corp. v. Woodson,  444 U.S. 286, 297

(1980)).

      Additionally, "the existence of minimum contacts turns on the presence

or absence of intentional acts of the defendant to avail itself of some benefit of

a forum state." Waste Mgmt., Inc. v. Admiral Ins. Co,  138 N.J. 106, 126 (1994).

The presence or absence of personal jurisdiction must be determined "on a case-


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                                        8
by-case basis." Bayway Ref. Co.,  333 N.J. Super. at 429. This analysis requires

a judicial examination of several elements in an effort to satisfy the notions of

"fair play and substantial justice." Lebel,  115 N.J. at 328. Specifically, the court

must consider:

            the burden on the defendant, the interests of the forum
            [s]tate, and the plaintiff's interest in obtaining relief. It
            must also weigh in its determination "the interstate
            judicial system's interest in obtaining the most efficient
            resolution of controversies; and the shared interest of
            the several [s]tates in furthering fundamental
            substantive social policies."

            [Asahi Metal Indus. Co., Ltd. v. Super. Ct. of Cal., 480 U.S. 102, 113 (1987) (quoting World-Wide
            Volkswagen,  444 U.S. at 292).]

      Measured against the standard of minimum contacts, the record is

adequate to support the judge's finding that New Jersey cannot assert personal

jurisdiction over these defendants.          We consider persuasive plaintiff's

representative traveled to East Meadow to place orders and deliver food

products. The record and deposition testimony clearly confirm these facts, and

plaintiff offered no evidence to the contrary. Defendants' only contact with New

Jersey was entering into a contract with plaintiff. This contact is inadequate to

satisfy "traditional notions of fair play and substantial justice." Int'l Shoe Co.,

 326 U.S.  at 316.


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Affirmed.




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