MARQUIS REALTY MANAGEMENT L.L.C. v. STABLER LAND COMPANY

 
(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NOT FOR PUBLICATION WITHOUT THE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-0

MARQUIS REALTY MANAGEMENT,

L.L.C.,

Plaintiff-Appellant,

v.

STABLER LAND COMPANY,

Defendant-Respondent.

____________________________

December 24, 2013

Argued Telephonically December 10, 2013 Decided

 

Before Judges Reisner and Carroll.

 

On appeal from the Superior Court of New Jersey, Law Division, Essex County, Docket No. L-6745-12.

 

Stuart Gold argued the cause for appellant (Mandelbaum, Salsburg, Lazris, & Discenza, P.C., attorneys; Charles S. Lorber of counsel and on the brief; Mr. Gold, on the brief).

 

Dean F. Piermattei argued the cause for respondent (Rhoads & Sinon, L.L.P., attorneys; Mr. Piermattei, on the brief).

 

PER CURIAM

Plaintiff Marquis Realty Management, LLC (Marquis), appeals from a trial court order dated March 15, 2013, dismissing its complaint against defendant Stabler Land Company (Stabler) for lack of personal jurisdiction. We affirm.

I

Plaintiff is a New Jersey company engaged in the business of developing real estate in New Jersey and Pennsylvania for commercial and residential purposes. Defendant is a Pennsylvania corporation in the business of developing land in the Lehigh Valley area of Pennsylvania. In 2007 plaintiff, through its New Jersey real estate broker, contacted defendant to inquire about purchasing part of a tract of land that defendant owned in Upper Saucon Township, Lehigh County, Pennsylvania. Defendant had not advertised the property in New Jersey or otherwise marketed the property there. The parties' representatives held a series of meetings in Pennsylvania, to view the property and negotiate the terms of sale.

On June 28, 2007 the parties entered into a contract for the sale of 2.5 acres.1 Pursuant to the contract, plaintiff paid defendant a $25,000 deposit. The contract provided that Pennsylvania law would govern any disputes arising under the agreement but did not contain a forum selection clause.

The property was located in an Environmentally Sensitive Zone, and non-residential use required approval from the Upper Saucon Township Board of Supervisors (township). Pursuant to the contract, plaintiff was responsible for obtaining any necessary land use approvals. The original closing date was scheduled for eighteen months after the contract was executed, to allow plaintiff to obtain approval from the township to develop the land as a bank and daycare facility. The closing date was extended ten times through amendments to the agreement; the final extension required plaintiff to close by September 30, 2012. However, plaintiff was unable to obtain the necessary land use approvals by the September 30, 2012 deadline. We briefly review the history of its efforts.

In 2008, plaintiff, through Saucon Creek Road, LP, a Pennsylvania corporation plaintiff created for the purpose of developing the property, filed a land use application with the township. Plaintiff used the services of New Jersey architectural and engineering companies to help in the application and development process. Through e-mails and telephone calls to defendant, these architects and engineers kept defendant apprised of the status of the zoning application. The record also indicates that numerous e-mails were exchanged between defendant's president, Robert Bower, and Brian Trematore, plaintiff's managing member. Through the e-mails, Trematore kept Bower informed of the status of the land use application and proposed several amendments to the contract, and Bower made suggestions to assist plaintiff in dealing with the local Pennsylvania land use officials.

On August 2, 2010, the township denied Saucon Creek Road's variance application. Plaintiff2 appealed the decision to the Court of Common Pleas, which affirmed the township's decision on May 23, 2011. Plaintiff further appealed to the Commonwealth Court of Pennsylvania, which denied the appeal on April 27, 2012. Thereafter, defendant notified plaintiff that it would not extend the closing date beyond September 30, 2012.

According to plaintiff, on an unspecified date in spring 2012, defendant announced its intention to donate to Lehigh University a 700-acre parcel of land that included the property then under contract to plaintiff. Lehigh notified plaintiff that, like defendant, it would not extend the closing date past September 30, 2012.

On September 13, 2012, plaintiff sued defendant in New Jersey, alleging fraud, breach of contract, and breach of the covenant of good faith and fair dealing. Among other things, plaintiff alleged that defendant knew all along that it planned to donate the land to the University, but encouraged plaintiff to continue with the land use approval process.3

In lieu of an answer, defendant filed a motion to dismiss for lack of personal jurisdiction. Judge Michelle Hollar-Gregory granted the motion, stating:

. . . The contract is silent as to forum selection, therefore absent any specific contractual provision this court is required to examine the conduct of the parties[.] . . . The provisions regarding the closing date made specific reference to Pennsylvania as the location where closing shall be held (see 9th amendment to K). The facts do not establish that defendant Stabler purposefully availed [itself] of any opportunity to engage in commercial transactions involving activities in this state, nor do they establish defendant should have anticipated that [its] conduct would have any significant effects in New Jersey. Given the very nature of the contract and its provisions regarding the Pennsylvania properties; that defendant did not advertise property in New Jersey; and that all property viewing and negotiations took place in Pennsylvania and New Jersey; and, that correspondence such as e-mails and telephone calls were received in New Jersey; the conduct of the parties weighs in favor of finding insufficient minimum contacts with New Jersey. This coupled with the notions of fair play and substantial justice warrant dismissal.

II

Because the jurisdictional issue is a legal question, our standard of review is de novo. Mastondrea v. Occidental Hotels Mgmt. S.A., 391 N.J. Super. 261, 268 (App. Div. 2007) (citing Vetrotex Certainteed Corp. v. Consol. Fiber Glass Prods. Co., 75 F.3d 147, 150 (3d Cir. 1996)).

On this appeal, plaintiff contends that the trial court erred "because [defendant] had substantial contacts with New Jersey concerning the subject matter of this action." We cannot agree.

In reviewing the factual record, we focus on whether plaintiff presented a prima facie case to support its claim of jurisdiction:

When a defendant asserts lack of personal jurisdiction, "the plaintiff bears the burden of demonstrating that the defendant's contacts with the forum state are sufficient to confer personal jurisdiction on the court." The plaintiff must establish defendant's contacts with the jurisdiction through the use of "sworn affidavits, certifications, or testimony." In the early stages of a proceeding "where the factual record consists of only pleadings and affidavits, plaintiff's burden is satisfied by establishing a prima facie case of jurisdiction."

 

[Jacobs v. Walt Disney World, Co., 309 N.J. Super. 443, 454 (App. Div. 1998) (citations omitted).]

 

On this record, we agree with the trial judge that plaintiff failed to meet its burden of establishing a prima facie case.

Consistent with the Due Process Clause, New Jersey's long-arm jurisdiction extends to the "uttermost limits permitted by the United States Constitution." Avdel Corp. v. Mecure, 58 N.J. 264, 268 (1971); see R. 4:4-4(e). Due process requires that in order for a state to exercise personal jurisdiction over a defendant, the defendant must "have certain minimum contacts with it such that the maintenance of the suit 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)).

"[T]he requisite quality and quantum of contacts is dependent on whether general or specific jurisdiction is asserted[.]" Citibank, N.A. v. Estate of Simpson, 290 N.J. Super. 519, 526 (App. Div. 1996). In this case, plaintiff premises its claim solely on specific jurisdiction, which is available when the "cause of action arises directly out of a defendant's contacts with the forum state." Waste Mgmt. v. Admiral Ins. Co., 138 N.J. 106, 119 (1994), cert. denied, 513 U.S. 1183, 115 S. Ct. 1175, 130 L. Ed. 2d 1128 (1995).

In the context of specific jurisdiction, "the minimum contacts inquiry must focus on 'the relationship among the defendant, the forum, and the litigation.'" Lebel v. Everglades Marina, Inc., 115 N.J. 317, 323 (1989) (citations omitted). 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." Ibid. (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)). Plaintiff must show that an out-of-state defendant committed "'some act by which [it] purposefully avail[ed] itself of the privilege of conducting activities within the forum state, thus invoking the benefit and protection of its laws.'" Waste Mgmt., supra, 138 N.J. at 120 (quoting Hanson v. Denckla, 357 U.S. 235, 253, 78 S. Ct. 1228, 1240, 2 L. Ed. 2d 1283, 1298 (1958)). While there is no requirement that the defendant ever be physically present in the forum state, see Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476, 105 S. Ct. 2174, 2184, 85 L. Ed. 2d 528, 543 (1985), "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., supra, 138 N.J. at 126.4

New Jersey and federal courts have held that e-mail and phone calls alone are insufficient to establish jurisdiction, without considering the nature and quality of the contact. See, e.g., Pfundstein v. Omnicom Grp., Inc., 285 N.J. Super. 245 (App. Div. 1995); Sunbelt Corp. v. Noble, Denton & Assocs. Inc., 5 F.3d 28, 32 (3d Cir. 1993) (holding that a party does not establish "minimum contacts" with a forum merely by contracting with a resident of the forum or by participating in communications in furtherance of the formation of such a contract). "[T]he mere transmittal of messages by mail or telephone within the state is not the critical factor, it is the nature of the contact." Lebel, supra, 115 N.J. at 325.

In Lebel, the plaintiff, a New Jersey resident, met a representative of the defendant, a Florida boat manufacturer, while attending a boat show in New York City. Id. at 320. Over the next two years the plaintiff received approximately twenty phone calls while in New Jersey from the defendant's representatives, soliciting plaintiff to purchase an expensive yacht. Ibid. During these phone calls, the parties negotiated the purchase price and features of the boat and the plaintiff expressed to the defendant's representatives his intention to use the boat in New Jersey. Ibid.

The plaintiff ultimately received and signed a sales agreement for the purchase of the boat while in New Jersey. Ibid. After the purchase, plaintiff hired a shipping company to deliver the boat to New Jersey; however, the carrier had an accident, the vessel was damaged, and the boat was returned to Florida. Ibid. While negotiating an appropriate resolution of the circumstances, the plaintiff suspected the defendant had acted fraudulently and filed a complaint against the defendant in New Jersey. Id. at 321.

The Court found that the "defendant's activities in regard to the specific sale at issue established sufficient contacts with the forum state." Id. at 324. The Court reasoned that "this defendant allegedly telephoned the buyer in New Jersey to iron out the details of the contract, mailed the contract to the buyer in New Jersey for signing in New Jersey, and received payment from the plaintiff, who defendant knew was a New Jersey resident." Id. at 324-25. The Court noted that "when a merchant uses the instrumentalities of commerce to tap an interstate market for its product, such wire and mail communications are relevant contacts to be considered." Id. at 325.

Based on these contacts, the Court found that the defendant purposefully directed its activities at New Jersey and that jurisdiction over the defendant would not offend traditional notions of fair play and substantial justice. Id. at 328-30. The Court reasoned that "the marketer of a big-ticket luxury item that accomplishes the sale by solicitation of the out-of-state buyer in the buyer's state can fairly be expected to contemplate that a breach of contract will expose it to a suit in the forum of the buyer." Id. at 330. However, the Court acknowledged that "this result pushes the 'outermost limit' of personal jurisdiction" in finding that jurisdiction over the defendant was appropriate. Id. at 329 (quoting Dave's Trash Removal v. Charm City Equip. Corp., 214 N.J. Super. 497, 500 (App. Div. 1987)).

By contrast, in Pfundstein v. Omnicon Group, Inc., 285 N.J. Super. 245 (App. Div. 1995), we found that New Jersey courts did not have jurisdiction over a New York corporation that executed a severance agreement with the plaintiff, an executive of the New York corporation's subsidiary. Id. at 252. The opinion noted that negotiation of the provisions of the agreement via telephonic and interstate mail communications was not an attempt by the defendant to "tap an interstate market or avail itself of the privilege of doing business" in New Jersey, but rather was "a 'fortuitous' or 'attenuated' contact between [the defendant] and New Jersey." Ibid. Thus, New Jersey could not exercise jurisdiction over the defendant. Ibid.

On the facts of this case, we cannot find a basis for the exercise of specific jurisdiction. Unlike Lebel, where the defendant solicited the transaction in numerous phone calls to the New Jersey plaintiff, here defendant did not solicit business from plaintiff. Rather, plaintiff's agent contacted defendant in Pennsylvania to solicit the purchase, and plaintiff's principals traveled to Pennsylvania to view the property and negotiate the deal. Further, unlike Lebel, where the defendant contracted to ship a yacht to a New Jersey buyer, for use in New Jersey, the subject of this transaction was a piece of land located exclusively in Pennsylvania. Lebel, supra, 115 N.J. at 320; see also Accura Zeisel Mach. Corp. v. Timco, Inc., 305 N.J. Super. 559 (App. Div. 1997) (finding personal jurisdiction where defendant sold plaintiff a large, expensive piece of machinery, knowing it would be used or re-sold in New Jersey).

Further, the fact that plaintiff signed the contract in New Jersey is not sufficient to establish defendant's minimum contacts for purposes of this lawsuit. Merely entering into a contractual relationship with a New Jersey corporation is insufficient to create minimum contacts with this state, "unless the foreign corporation entering into that relationship can reasonably have contemplated 'significant activities or effects' in the forum state." Bayway Ref. Co. v. State Utils., Inc., 333 N.J. Super. 420, 431 (App. Div.) (quoting Corp. Dev. Specialists, Inc. v. Warren-Teed Pharm., Inc., 102 N.J. Super. 143, 155 (App. Div. 1968)), certif. denied, 165 N.J. 605 (2000). In this case, there is no evidence that defendant anticipated, or should have reasonably anticipated, that the contract to sell a piece of land in Pennsylvania would trigger significant activity or impact in New Jersey. The contract contemplated that plaintiff would need to obtain land use approvals, but that application, and any subsequent appeals, would obviously occur in Pennsylvania. The contract by its terms neither required nor anticipated that plaintiff would use New Jersey-based experts in pursuing the land use application. That was plaintiff's choice.

After the contract was signed, the parties communicated by e-mail and telephone concerning the status of the Pennsylvania land use application, and concerning defendant's repeated requests for extensions of the closing date. However, those contacts, between parties in different states, are insufficient to satisfy the minimum contacts standard, because they do not demonstrate defendant's purposeful effort to avail itself of New Jersey's laws. See Waste Mgmt., supra, 138 N.J. at 126. Rather, they evidence plaintiff's efforts to avail itself of Pennsylvania's land use laws, and its communication to defendant of the status of those efforts.

Plaintiff's appellate contentions do not warrant further discussion in a written opinion. R. 2:11-3(e)(1)(E).

Affirmed.

 

1 The contract was amended on March 6, 2009 to provide for the sale of 4.001 acres.

2 Neither party has provided us with copies of the Pennsylvania land use application or the subsequent Pennsylvania court decisions. However, if, as Trematore attested, the land use application was filed by Saucon Creek Road, the Pennsylvania corporation, it logically follows that the appeals would have been filed by the Pennsylvania corporation as well.

3 According to Trematore, plaintiff expended over $500,000 in developing the property, which included legal and expert fees incurred in applying for the conditional use approval and appealing the township's decision. Trematore attested that defendant offered to grant plaintiff a credit against the purchase price for some of the expenses incurred, if plaintiff could obtain the necessary approvals and proceed with construction.

4 If a defendant has minimum contacts with the state, the court must also determine whether "the assertion of jurisdiction affect[s] traditional notions of fair play and substantial justice." Blakey v. Cont'l Airlines, 164 N.J. 38, 69 (2000).