J.I. Kislak, Inc. v. Trumbull Shopping Park, Inc.

• Decision Date: 18 May 1977
• Citation: 150 N.J.Super. 96,374 A.2d 1246
• Parties: J.I. KISLAK, INC., Plaintiff-Appellant, v. TRUMBULL SHOPPING PARK, INC., a Delaware corporation, and The Frouge Corporation, a Delaware corporation, Defendants-Respondents.
• Court: New Jersey Superior Court — Appellate Division

Page 96

150 N.J.Super. 96

374 A.2d 1246

J.I. KISLAK, INC., Plaintiff-Appellant, v. TRUMBULL SHOPPING PARK, INC., a Delaware corporation, and The Frouge Corporation, a Delaware corporation Defendants-Respondents.

Superior Court of New Jersey,

Appellate Division.

Argued May 2, 1977.

Decided May 18, 1977.

Frederick M. Testa, Newark, for plaintiff-appellant.

Dominick A. Mazzagetti, Newark, for defendants-respondents (Lum, Biunno & Tompkins, Newark, attorneys).

Before Judges CARTON, KOLE and LARNER.

The opinion of the court was delivered by

LARNER, J.A.D.

The issue on this appeal is whether the courts of New Jersey may constitutionally acquire In personam jurisdiction over defendant, a nonresident corporation. The trial court dismissed the complaint for lack of jurisdiction and plaintiff appeals. The legal principles dealing with exercise of long-arm jurisdiction have been articulated in the landmark opinions in International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945); McGee v. International Life Ins. Co., 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223 (1957), and Hanson v. Denckla, 357 U.S. 235, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958), which have subsequently been expanded and applied in a multitude of cases in this State and other jurisdictions. See, E.g., Avdel Corp. v. Mecure, 58 N.J. 264, 277 A.2d 207 (1971); J.W. Sparks & Co. v. Gallos, 47 N.J. 295, 220 A.2d 673 (1966); Roland v. Modell's Shoppers World of Bergen Cty., 92 N.J.Super. 1, 222 A.2d 110 (App.Div.1966).

New Jersey has through its longarm rule adopted a judicial policy which permits service on nonresident defendants to the outer limits of the due process requirements of the United States Constitution. See R. 4:4--4(c)(1); Avdel Corp. v. Mecure and Roland v. Modell's Shoppers World of Bergen Cty., supra. Although this concept has resulted in a flexible and indulgent view leading to exercise of jurisdiction against nonresidents in many cases, nevertheless we are constrained by the caveat in Hanson v. Denckla, supra, which emphasizes:

But it is a mistake to assume that this trend heralds the eventual demise of all restrictions on the personal jurisdiction of state courts. See Vanderbilt v. Vanderbilt, 354 U.S. 416, 418, 77 S.Ct. 1360, 1362, 1 L.Ed.2d 1456, 1459. 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 States. However 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. (357 U.S. at 251, 78 S.Ct. at 1238, 2 L.Ed.2d at 1296)

A further exploration of the development of the law on this subject would be of no value, for the unresolved question in each case is not the statement of the principles of law involved but rather the application of those principles to a particular fact complex.

Plaintiff J.I. Kislak, Inc. (Kislak) claims commissions due under an agreement executed in 1962 between it and Trumbull Shopping Park, Inc. (Trumbull) whereby Kislak was retained as an exclusive renting agent for stores in a shopping center developed by Trumbull. This agreement was a sequel to a similar 1960 agreement which resulted in Kislak obtaining Korvettes as the major tenant in the complex. Commissions were payable over a number of years during the terms of the respective leases. Defendant Trumbull paid commissions until 1970, at which time it discontinued any further payments under the agreement, and thereby inspired Kislak to institute this lawsuit.

The written agreement, a culmination of defendant's solicitation of plaintiff in Connecticut, was executed by both parties in Bridgeport, Connecticut, and involved defendant's real estate development located in Connecticut. Defendant Trumbull is a Delaware corporation having its principal office in Bridgeport, Connecticut, while Kislak is a New Jersey corporation with its principal office in Newark. The agreement specifically provides that it is to be controlled by the laws of the State of Connecticut.

Affidavits filed with the trial court establish without contradiction that Trumbull has never entered the State of New Jersey in connection with the execution or performance of the agreement through any of its officers or employees. Similarly, defendant has had no contact with this State through the conduct of any type of business herein or through the possession or ownership of any real estate, offices, places of business or the presence of personnel or representatives. In essence, defendant has had no direct contact whatever with the State of New Jersey in connection with the agreement or with any of its other pursuits.

Plaintiff urges that the 'minimum contacts' criterion of International Shoe, and Hanson v. Denckla, supra, is satisfied through the route of '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, supra, 357 U.S. at 253, 78 S.Ct. at 1240, 2 L.Ed.2d at 1298. The factual basis for this contention is that Kislak made many contacts with prospective tenants by letters and telephone calls emanating from its New Jersey office and received many inquiries from such prospects at that office. It is argued that this aspect of Kislak's performance was contemplated by the agreement and anticipated by Trumbull when it entered into the agreement.

In contrast to these New Jersey-based activities of Kislak, Trumbull points to the fact that all meetings between its representatives and prospective tenants or Kislak's representatives took place in Connecticut or New York and never in New Jersey.

The foregoing facts place in sharp focus the question whether the described part performance of Kislak's contractual services in New Jersey suffices Per se as the 'minimal contacts' required for the constitutional exercise of jurisdiction. The answer to this question brings into play the doctrine which equates the effects in the forum state caused by the acts of defendant elsewhere with the criterion of 'minimal contacts' of defendant within the forum state. This doctrine is codified in Restatement 2d, Conflict of Laws, § 50 at 178--179:

A state has power to exercise judicial jurisdiction over a foreign corporation which causes effects in the state by an act done elsewhere with respect to any cause of action arising from these effects unless the nature of these effects and of the corporation's relationship to the state makes the exercise of such jurisdiction unreasonable.

See also, Caveat and Reporter's Note under Restatement 2d, Supra at § 37.

As observed in Avdel Corp. v. Mecure, supra, 58 N.J. at 272, 277 A.2d 207; Resin Research Lab., Inc. v. Gemini Roller Corp., 105 N.J.Super. 401, 404, 252 A.2d 415 (App.Div.1969), and Corporate Dev. Spec., Inc. v. Warren-Teed Pharm., Inc., 99 N.J.Super. 493, 240 A.2d 450 (App.Div.), on remand 102 N.J.Super. 143, 149--150, 245 A.2d 517 (App.Div.), certif. den. 52 N.J. 535, 247 A.2d 16 (1968), jurisdiction will be accepted where a nonresident party to a contract anticipated or should have anticipated that his conduct would have significant effects in the forum state. Nevertheless, the application of this doctrine is tempered by the oft-repeated condition that the nature and quality of these effects in the forum state must be so significant that they will not make the exercise of jurisdiction unreasonable. See Restatement 2d, Supra.

We return to the words of Chief Justice Warren in Hanson v. Denckla, supra:

The unilateral activity of those who claim some relationship with a nonresident defendant cannot satisfy the requirement of contact with the forum State. The application of that rule will vary with the quality and nature of the defendant's activity, but it is essential in each case that there 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. (357 U.S. at 253, 78 S.Ct. at 1239, 2 L.Ed.2d at 1298)

See also, DeLear v. Rozel Packing Corp., 95 N.J.Super. 344, 231 A.2d 232 (App.Div.1967); Webb v. Stanker and Galetto, Inc., 84 N.J.Super. 178, 201 A.2d 387 (App.Div.), certif. den. 43 N.J. 263, 203 A.2d 716 (1964), Cert. den. 380 U.S. 907, 85 S.Ct. 888, 13 L.Ed.2d 795 (1965).

Our assessment of the facts herein does not lead to the conclusion that defendant, by the mere execution of the contract with a New Jersey corporation and probable anticipation that some of plaintiff's activities in performing the contract might be carried out in its New Jersey office, is equivalent to the status of a party who has 'purposefully availed itself of the privilege of conducting activities' within New Jersey.

The truly significant effects of the contract were contemplated and in fact took place in New York and Connecticut where the property was exhibited to prospective tenants and leases negotiated, prepared and executed, which in turn created plaintiff's right to a cause of action. The overall kernal of the relationship between the parties consisted of real...