AFI Foodservice Dist. Inc. v RLD Treats, Inc.

[*1] AFI Foodservice Dist. Inc. v RLD Treats, Inc. 2007 NY Slip Op 51330(U) [16 Misc 3d 1107(A)] Decided on July 9, 2007 Nassau Dist Ct Engel, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on July 9, 2007
Nassau Dist Ct

AFI Foodservice Dist. Inc., Plaintiff,

against

RLD Treats, Inc. t/a TCBY and Louis Brienza, Defendants.



25841/03



Attorney for Plaintiff: Leslie Martin Shamis, Esq.

Attorneys for Defendant: Law Offices of Leonard Rodney

Andrew M. Engel, J.

The Plaintiff commenced this action seeking to recover monies allegedly due and owing for goods delivered to the Defendant, RLD Treats, Inc. t/a TCBY (hereinafter "RLD"), the payment for which was allegedly guaranteed by the Defendant, Louis Brienza, (hereinafter "Brienza") on or about October 3, 2003. Issue was joined on or about December 23, 2003. The Plaintiff now moves for an order granting it summary judgment. The Defendant opposes the application.

The Plaintiff's Complaint sets forth four (4) causes of action. The first seeks a judgment giving full faith and credit to a previous judgment obtained by the Plaintiff, against the Defendants, in the State of New Jersey on April 1, 2003, in the sum of $10,372.38. The second cause of action seeks to recover the sum of $8,076.38 for the Defendants' alleged breach of contract for goods sold and delivered. The third cause of action seeks $8,076.38 on the basis of an alleged account stated; and, the fourth cause of action seeks counsel fees, interest and costs pursuant to the contract between the parties.

In support of its motion, the Plaintiff submits a certified copy of the New Jersey judgment. The Plaintiff alleges that the Defendant, RLD, purchased goods from the Plaintiff, the total cost of which was $8,076.38, which were delivered to RLD, for which the Plaintiff has not been paid. The Plaintiff further alleges that the contract pursuant to which these goods were sold [*2]and delivered was guaranteed by the Defendant, Brienza.[FN1]

In opposition to the motion, the Defendants allege that the New Jersey judgment was entered on default. The Defendants do not contest that they were properly served with process or that they had notice of the New Jersey proceeding; they do, however, argue that the New Jersey court lacked personal jurisdiction over them by virtue of their claim that neither Defendant had any contact with the State of New Jersey in their dealings with the Plaintiff, or in any other manner. Specifically, the Defendants allege that the Defendant, RLD, is a New York corporation, which owned and operated a TCBY yogurt franchise in Howard Beach, New York; that all of RLD's business was conducted in New York; that the credit application and personal guarantee were signed in New York; that all transactions with the Plaintiff were conducted in New York; that all orders for goods were placed in New York; that all goods were shipped into New York; that all goods were stored and sold in New York; and that the Defendant, Brienza, lives in the State of New York and has no contacts with the State of New Jersey. The Plaintiff does not contest any of these facts asserted by the Defendants.

The Defendants further allege that in their course of dealing with the Plaintiff, if any one (1) invoice went unpaid the Plaintiff would stop making all deliveries, except those made on a COD basis. According to the Defendants, in such a circumstance, the Plaintiff's delivery person would pick up a check for the open balance upon making a new delivery. The Defendants further allege that the invoices here in question where handled in this manner and that payment was made for each of these invoices, "less any applicable deductions for shortages" (Brienza Affidavit 3/28/07, ¶ 9), at the time of each subsequent delivery.

Summary judgment is a drastic remedy, Sillman v. Twentieth Century-Fox Film Corporation, 3 NY2d 395, 165 NYS2d 498 (1957), which should not be granted where there is any doubt as to the existence of a triable issue of fact. Rotuba Extruders, Inc. v. Ceppos, 46 NY2d 223, 413 NYS2d 141 (1978) To prevail, the movant must first make a showing of entitlement to judgment, as a matter of law, Bank of New York v. Granat, 197 AD2d 653, 602 NYS2d 942 (2nd Dept. 1993), tendering evidentiary proof in admissible form. Friends of Animals, Inc. v. Associate Fur Manufacturers, Inc., 46 NY2d 1065, 416 NYS2d 790 (1979). It is only thereafter incumbent upon the party opposing summary judgment to "demonstrate by admissible evidence the existence of a factual issue requiring a trial of the action or tender an acceptable excuse for his failure so to do." Zuckerman v. City of New York, 49 NY2d 557, 427 NYS2d 595 (1980). The movant's failure to make such a showing, regardless of the sufficiency of opposing papers, mandates the denial of a summary judgment motion. Winegrad v. New York University Medical Center, 64 NY2d 851, 487 NYS2d 316 (1985) Such is the case before this court.

As indicated, the Plaintiff's first cause of action seeks the entry of a judgment based upon a judgment previously entered on its behalf, against the Defendants, in the State of New Jersey. The Plaintiff argues that this court must give full faith and credit to the New Jersey [*3]judgment and enter same here in New York.

So as to avoid conflicts between States in adjudicating the same matters, "Article IV, § 1 of the United States Constitution requires that the ... judicial proceedings of each State should be given full faith and credit in every other State." Luna v. Dobson, 97 NY2d 178, 738 NYS2d 5 (2001); See also: United National Assurance Company v. North Carolina Life and Accident and Health Insurance Guaranty Association, 455 U.S. 691, 102 S. Ct. 1357 (1982); O'Connell v. Corcoran, 1 NY3d 179, 770 NYS2d 673 (2003) "The doctrine establishes a rule of evidence, ... , which requires recognition of the foreign judgment as proof of the prior-out-of-State litigation and gives it res judicata effect, thus avoiding relitigation of issues in one State which have already been decided in another (citations omitted)." In the Matter of Farmland Dairies v. Barber, 65 NY2d 51, 489 NYS2d 713 (1985) rearg. den. 65 NY 924, 493 NYS2d 1030 (1985); See also: FMB Systems, Inc. v. Merriam Gateway Associates, 254 AD2d 452, 678 NYS2d 779 (2nd Dept.1998)

In the absence of a jurisdictional challenge, the Defendants' default is not an impediment to a finding by this court that the New Jersey judgment is conclusive and entitled to be given full faith and credit in New York. GNOC Corp. v. Capelletti, 208 AD2d 498, 616 NYS2d 1018 (2nd Dept. 1994); All Terrain Properties, Inc. v. Hoy, 265 AD2d 87, 705 NYS2d 350 (1st Dept. 2000); JDC Finance Company I, L.P. v. Patton, 284 AD2d 164, 727 NYS2d 71 (1st Dept. 2001) Where a jurisdictional challenge has been made, as herein, the court's review of the New Jersey judgment is limited to determining whether the New Jersey court had personal jurisdiction over the Defendants, including a due process inquiry. Fiore v. Oakwood Plaza Shopping Center, Inc., 78 NY2d 572, 578 NYS2d 115 (1991); F.D.I.C. v. De Cresenzo, 207 AD2d 823, 616 NYS2d 638 (2nd Dept. 1994); Desai v. Sterling Fibers, Inc., 288 AD2d 428, 733 NYS2d 481 (2nd Dept. 2001)

If, after such inquiry, it is determined that the sister state properly acquired jurisdiction, the Defendants' default notwithstanding, the judgment will be given res judicata effect. Dominican Sisters of Ontario, Inc. v. Dunn, 272 AD2d 414, 668 NYS2d 164 (2nd Dept. 2000); Ionescue v. Brancoveanu, 246 AD2d 414, 668 NYS2d 164 (1st Dept. 1998) Conversely, if the sister state did not have jurisdiction over the Defendants, full faith and credit will not be given to that State's judgment. State of Oklahoma v. LNP Realty Corp., 275 AD2d 773, 713 NYS2d 537 (2nd Dept. 2000); Cucullu v. Lowe, 241 AD2d 474, 661 NYS2d 16 (2nd Dept. 1997); City Federal Savings Bank v. Reckmeyer, 178 AD2d 503, 577 NYS2d 430 (2nd Dept. 1991)

The issue of personal jurisdiction having been raised, the Plaintiff has the burden of proving jurisdiction in New Jersey. Cadle Co. v. Tri-Angle Associates, 18 AD3d 100, 798 NYS2d 360 (1st Dept. 2005) In reaching this issue, it is the law of the State which rendered the judgment, here New Jersey, which determines whether or not jurisdiction was properly obtained, even if such law may be at odds with the New York rule. Augusta Lumber & Supply, Inc. v. Herbert H. Sabbeth Corp., 101 AD2d 846, 475 NYS2d 878 (2nd Dept. 1984); China Express, Inc. v. Volpi & Son Machine Corp., 126 AD2d 239, 513 NYS2d 388 (1st Dept. 1987) The court must not only determine whether or not New Jersey's long arm statute has been complied with, but must determine "whether [the New Jersey] court's exercise of jurisdiction comports with Federal constitutional principles of due process." JDC Finance Company I, L.P. v. Patton, supra .; see also: Cucullu v. Lowe, supra .; City Federal Savings Bank v. Reckmeyer, supra .

New Jersey's long arm rule has "adopted a judicial policy which permits service on nonresident defendants to the outer limits of the due process requirements of the United [*4]States Constitution. See R. 4:4 4(c)(1)" Avdel Corp. v. Mecure, 58 N.J. 264, 277 A.2d 207 (1971); See also: Reliance National Insurance Company In Liquidation v. Dana Transport, Inc., 376 N.J.Super. 537, 871 A.2d 120 (App. Div. 2005); J.I. Kislak, Inc. v. Trumbull Shopping Park, Inc., 150 N.J.Super. 96, 374 A.2d 1246 (App. Div. 1977) As such, any analysis of compliance with New Jersey's long arm statute, of necessity, includes a review of the full reach of Federal constitutional principles of due process.

Before adoption of the Fourteenth Amendment to the Constitution of the United States, "an exercise of jurisdiction over persons or property outside the forum State was thought to be an absolute nullity[.]" Hanson v. Denckla, 357 U.S. 235, 78 S. Ct. 1228 (1958) Even thereafter, a party's presence within the territorial jurisdiction of the court was a prerequisite to the rendition of a judgment which would be binding against such party. Pennoyer v. Neff, 95 U.S. 714, 24 L. Ed. 565 (1877) Not quite three-quarters (¾) of a century later the United States Supreme Court, in International Shoe Co. v. State of Washington, Office of Unemployment, 326 U.S. 310, 66 S. Ct. 154 (1945), recognized:

But now that the capias ad respondendum has given way to personal service of summons or other form of notice, 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 a certain minimum contacts with it such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.' Milliken v. Meyer, 311 U.S. 457, 463, 61 S. Ct. 339, 343, 85 L. Ed. 278, 132 A.L.R. 1357.

This same "minimum contacts" standard has been adopted by the courts of the State of New Jersey. Blakey v. Continental Airlines, Inc., 164 N.J. 38, 751 A.2d 538 (2000); Keech v. Lapointe Machine Tool Co., 200 N.J.Super. 177, 491 A.2d 10 (App. Div. 1985)

The court in International Shoe Co., supra . at 319, 66 S. Ct. at 159 noted that a determination of which activities which will subject a non-resident of the forum State to suit in that State "cannot be simply mechanical or quantitative."; See also: Shaffer v. Heitner, 433 U.S. 186, 97 S. Ct. 2569 (1977) The degree of contact necessary to satisfy constitutional due process requirements "must depend rather upon the quality and nature of the activity in relation to the fair and orderly administration of the laws which it was the purpose of the due process clause to insure. International Shoe Co. v. State of Washington, Office of Unemployment, supra . at 319, 66 S. Ct. at 160 The court found that, to the extent a party avails itself of the privileges and protections of conducting activities within a State, so too must that party subject itself to obligations within that State, to the extent that said obligations arise out of or are connected to the in state activities, including the obligation to be subject to suit in that State.

Noting the increase in the flow of commerce between the States, brought about by technological progress, along with improved communication and transportation systems making the defense of suits in a foreign court less onerous, the court's decision in International Shoe Co., supra . has been seen as a necessary relaxation of the previously rigid requirements for the exercise of personal jurisdiction over non-resident defendants. Hanson v. Denckla, 357 U.S. 235, 78 S. Ct. 1228 (1958) "But [as the court points out] it is a mistake to assume that this trend heralds the eventual demise of all restrictions on the personal jurisdiction of state courts. (citation omitted) Those restrictions are more than a guarantee of immunity from inconvenient or distant litigation. They are a consequence of territorial limitations on the power of the respective [*5]States." Hanson v. Denckla, supra . at 251, 78 S. Ct. at 1238 The court reiterated and reaffirmed that "[h]owever minimal the burden of defending in a foreign tribunal, a defendant may not be called upon to do so unless he has had the minimal contacts' with that State that are a prerequisite to its exercise of power over him." Id. at 251, 78 S. Ct. 1238; See also: World-Wide Volkswagen Corporation v. Woodson, 444 U.S. 286, 100 S. Ct. 559 (1980); J.I. Kislak, Inc. v. Trumbull Shopping Park, Inc., supra .

In determining whether such "minimal contacts" exist before a State may exercise jurisdiction over a non-resident defendant the court must be concerned with the relationship among the defendant, the forum and the litigation. Shaffer v. Heitner, supra .; Blakey v. Continental Airlines, Inc., supra . "The relationship between the defendant and the forum must be such that it is reasonable ... to require the [defendant] to defend the particular suit which is brought there.' (citation omitted)." World-Wide Volkswagen Corporation v. Woodson, supra . at 292, 100 S. Ct. at 564 This consideration must be weighed against such factors as the forum State's interest in adjudicating the dispute, the Plaintiff's interest in obtaining convenient and effective relief, the interest of all States in obtaining the most efficient resolution of controversies and fostering fundamental substantive social policies. Nevertheless, "[e]ven if the defendant would suffer minimal or no inconvenience from being forced to litigate before the tribunals of another State; even if the forum State has a strong interest in applying its law to the controversy; even if the forum State is the most convenient location for litigation, the Due Process clause, acting as an instrument of interstate federalism, may sometimes act to divest the State of its power to render a valid judgment." World-Wide Volkswagen Corporation v. Woodson, supra . at 294, 100 S. Ct. At 565

At the end of the day, while "[a] State generally has a manifest interest' in providing its residents with a convenient forum for redressing injuries inflicted by out-of-state actors[] ... the constitutional touchstone remains whether the defendant purposefully established minimum contacts' in the forum (citation omitted)." Burger King Corporation v. Rudzewicz, 471 U.S. 462, 105 S. Ct. 2174 (1985) We are specifically concerned with such contacts which "proximately result from actions by the defendant himself that create a substantial connection' with the forum State[,]" (emphasis in original) Id, at 475, 105 S. Ct. at 2184, from which the defendant "should reasonably anticipate being haled into court there" World-Wide Volkswagen Corporation v. Woodson, supra . at 297, 100 S. Ct. at 567; See also: Burger King Corporation v. Rudzewicz, supra .; William Sternberg & Assoc., Inc. v. Litho Supply, Inc., 219 N.J.Super. 201, 530 A.2d 53 (Law Div. 1987), as opposed to " random,' fortuitous,' or attenuated' contacts Keeton v. Hustler Magazine, Inc., 465 U.S., at 774, 104 S.Ct., at 1478; World-Wide Volkswagen Corp. v. Woodson, supra , 444 U.S., at 299, 100 S.Ct., at 568, or of the unilateral activity of another party or a third person,' Helicopteros Nacionales de Colombia, S.A. v. Hall, supra , 466 U.S., at 417, 104 S.Ct., at 1873."

Applying these constitutional due process principles, along with the long arm provisions of the State of New Jersey, to the matter sub judice,it is the opinion of this court that the Plaintiff has failed to establish that New Jersey properly exercised in personam jurisdiction over the Defendants herein and that the New Jersey judgment is not entitled to full faith and credit here in New York. It is uncontroverted herein that there was no conduct on the part of these Defendants which created any connection with the State of New Jersey. The credit agreement and guarantee were executed in New York; the goods were ordered in New York; the goods were stored and sold exclusively in New York; both Defendants are residents of New [*6]York; and, all business transacted between the Plaintiff and the Defendants was had in New York. The only connection the Defendants have with New Jersey is that they contracted for the distribution of food products with the Plaintiff, a New Jersey company. As noted in Bayway Refining Company v. State Utilities, Inc., 333 N.J.Super. 420, 755 A.2d 1204 (App. Div. 2000) aff'd 165 N.J. 605 762 A.2d 219 (2000), "The existence of a contractual relationship alone is not enough to sustain jurisdiction unless the foreign corporation entering into that relationship can reasonably have contemplated significant activities or effects' in the forum state." See also: J.I. Kislak, Inc. v. Trumbull Shopping Park, Inc., supra . and Burger King Corporation v. Rudzewicz, supra . at 478, 105 S. Ct. at 2185 ["if the question is whether an individual's contract with an out-of-state party alone can automatically establish sufficient minimum contacts in the other party's home forum, we believe the answer clearly is that it cannot."] (emphasis in original)

The facts of Bayway Refining Company v. State Utilities, Inc., supra . are similar to those herein. The Plaintiff manufactured petroleum products in Linden, New Jersey, which it then shipped into New York, where it was purchased by the Plaintiff, a New York corporation, which then sold home heating oil to homeowners in Nassau and Suffolk Counties. In addition thereto the contracts and personal guarantees between the parties were entered into in the State of New York and the only connection with the State of New Jersey, other than the fact that the oil was purchased from a New Jersey refinery, was that the Defendants' credit reports were reviewed in New Jersey and payment was received in New Jersey. In dismissing the action for lack of in personam jurisdiction, the court found it significant that the defendant's

"role in the transaction sued upon was no more than that of a passive buyer. [Defendant] did nothing to avail itself of the benefits or protections of New Jersey law, nor did it have reason to contemplate that by continuing to purchase oil from the same New York terminals as it had in the past, it would be causing significant effects in New Jersey. [Plaintiff's] sale of home heating oil to [defendant] was a commercial transaction of a type that occurs perhaps hundreds of thousands of times every day. No special manufacturing was required; no special delivery was involved; no special financing terms existed; in short, [defendant's] purchases from [plaintiff] ... involved nothing more than an agreement to buy a specified quantity of a generic, mass-produced commodity for an agreed upon price at an agreed upon time." Id. at 434, 755 A.2d 1211

The court further did not find it jurisdictionally significant that the defendant's alleged breach of contract "caused an effect in New Jersey in the sense that a New Jersey company lost the revenue the sale would have generated ...." Id. at 434, 755 A.2d at 1213 Such is the case before this court. See also: NJM, Inc. v. Nationwide Fund Raisers, Inc., 180 N.J. Super. 100, 433 A.2d 829 (Law Div. 1981) [action by New Jersey manufacturer of labeling machine against a Georgia corporation purchasing same dismissed due to the lack of personal jurisdiction, the court holding "The minimum contacts standard is not satisfied simply because some essential activitiy incident to the contract took place in New Jersey. Economic activity, so as to be constitutionally cognizable, must rise to a higher level."] Compare: Avdel Corp. v. Mecure, supra . [personal jurisdiction in New Jersey upheld for sale of rivets by a New Jersey corporation to a New York resident where the rivets were specially manufactured in New Jersey at the defendant's request, the defendant traveled to New Jersey to discuss the contract and the defendant toured the plaintiff's plant in New Jersey] and Elizabeth Iron Works, Inc. v. Kevon Construction Corp.,155 N.J.Super. 175, 382 A.2d 648 (App. Div. 1976) aff'd 75 N.J. 332 A.2d 636 (1978) [personal [*7]jurisdiction in New Jersey upheld for sale of structural steel by New Jersey seller to Pennsylvania purchaser where steel beams were specially manufactured in New Jersey with the defendant's knowledge and the contract was largely performed in New Jersey]

The Plaintiff having failed to come forth with any proof to establish the Defendants' "minimum contacts" with the State of New Jersey, that branch of the Plaintiff's motion which seeks summary judgment on its first cause of action is denied. Moreover, having searched the record, and finding no basis upon which this court can find in personam jurisdiction over these Defendants in the State of New Jersey, the Defendants are granted partial summary judgment against the Plaintiff on the Plaintiff's first cause of action and that cause of action is hereby dismissed. CPLR § 3212(b); GNOC Corp. v. Cappelletti, supra .; Federal National Mortgage Association v. Katz, 33 AD3d 755, 822 NYS2d 759 (2nd Dept. 2006); Taterka v. Nationwide Mutual Insurance Company, 91 AD2d 568, 457 NYS2d 53 (1st Dept. 1982) aff'd 59 NY2d 743, 463 NYS2d 441 (1983)

Those branches of the Plaintiff's motion seeking summary judgment on its second, third and fourth causes of action are denied as well. In the first instance, it is noted that the Plaintiff has failed to meet its burden by submitting proof in evidentiary form. Simply annexing documents to the moving papers, without a proper evidentiary foundation is inadequate. Higen Associates v. Serge Elevator Co., Inc., 190 AD2d 712, 593 NYS2d 319 (2nd Dept. 1993); Palisades Collection, LLC v. Gonzalez, 10 Misc 3d 1058(A), 809 NYS2d 482 (Civ. Ct. NY Co. 2005). Moreover, the invoices submitted by the Plaintiff in support of its motion are barely legible. This notwithstanding, the Defendants have raised genuine issues of fact concerning the propriety and payment of the Plaintiff's invoices which can only be resolved by the trier of facts.

This constitutes the decision and order of this court.

Dated: Hempstead, New York

July 9, 2007

___________________________

ANDREW M. ENGEL

J.D.C. Footnotes

Footnote 1: The court notes that while the affidavit of Andrea Lia, submitted on behalf of the Plaintiff, refers "ROBERT J. BRIENZA" (Lia Affidavit, 2/14/07, ¶ 5) as having guaranteed payment, the guarantee submitted by the Plaintiff appears to have been signed by Louis Brienza and witnessed by Robert Brienza. Indeed, the Defendant, Louis Brienza, acknowledges that he is the guarantor.