H. James Rippon v. Leroy Smigel, Esq.

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-2722-15T2
H. JAMES RIPPON,
Plaintiff-Appellant, APPROVED FOR PUBLICATION
v. March 22, 2017
LEROY SMIGEL, ESQ., APPELLATE DIVISION
SMIGEL, ANDERSON & SACKS,
and CAYLENE RIPPON,
Defendants-Respondents.
___________________________________
Argued March 13, 2017 – Decided March 22, 2017
Before Judges Nugent, Haas, and Currier.
On appeal from Superior Court of New Jersey,
Law Division, Cape May County, Docket No. L-
455-15.
Adrienne C. Rogove argued the cause for
appellant (Blank Rome, LLP, attorneys; Ms.
Rogove and Ethan M. Simon, of counsel and on
the brief).
Paul A. Carbon argued the cause for
respondents Leroy Smigel, Esq. and Smigel,
Anderson & Sacks (Margolis Edelstein,
attorneys; Mr. Carbon, of counsel and on the
brief; Sara E. Hoffman, on the brief).
Lisa M. Hardy argued the cause for
respondent Caylene Rippon.
The opinion of the court was delivered by
HAAS, J.A.D.
Plaintiff H. James Rippon appeals from the January 20, 2016
Law Division order granting motions by defendants Leroy Smigel,
Esq. ("Smigel"), Smigel's law firm, Smigel, Anderson & Sacks
("firm"), and Caylene Rippon1 to dismiss plaintiff's complaint on
jurisdictional and other grounds. After reviewing the record in
light of the contentions advanced on appeal, we reverse and
remand for further proceedings.
I.
We derive the following facts from the sparse record
presented on appeal. During the relevant time periods involving
the matters on appeal, Smigel and his firm represented Caylene
in three separate actions against plaintiff that were pending in
Pennsylvania: (1) a divorce proceeding filed by plaintiff
against Caylene; (2) a petition Caylene filed against plaintiff
to have him declared incompetent; and (3) a protection from
abuse proceeding that Caylene instituted against plaintiff. All
three proceedings were highly contentious. Pursuant to a May
23, 2012 order entered in Pennsylvania, plaintiff and Caylene
were directed not to have any contact with each other.2
1
Plaintiff H. James Rippon and his spouse, Caylene Rippon, share
the same surname. To avoid confusion, we refer to H. James
Rippon as "plaintiff" and to Caylene Rippon as "Caylene." In
doing so, we intend no disrespect.
2
By its express terms, this order expired on May 23, 2014.
(continued)
2 A-2722-15T2
At the same time that Smigel and his firm were representing
Caylene in these matters, plaintiff alleged that these two
defendants were also representing a business that plaintiff and
Caylene jointly owned and that in the course of that
representation, they were improperly protecting only Caylene's
interests.3 On September 12, 2013, plaintiff filed suit against
Smigel and his firm in Pennsylvania for breach of their
fiduciary duty to him. Caylene was not a party to this
litigation.
In the "background facts" section of plaintiff's complaint,
he listed nine examples of instances where Smigel and his firm
allegedly had taken "positions adverse to" him on behalf of
Caylene. As one of these examples, plaintiff stated that
"Smigel and his firm, on behalf of Caylene, have attempted to
thwart the purchase of a property in Stone Harbor," New Jersey
by plaintiff.4
On June 6, 2014, plaintiff and Caylene entered into an
"Interim Joint Stipulation" in their divorce proceeding. Among
(continued)
3
The business, which was named "KLE", owned motels in
Pennsylvania and Maryland. Caylene effectively owned 51% of the
business, with plaintiff owning 49.5%.
4
No further explanation of this allegation is contained in the
September 12, 2013 complaint.
3 A-2722-15T2
other things, plaintiff agreed to convey all of his interest in
KLE to Caylene. Plaintiff also agreed to "withdraw with
prejudice" the lawsuit he had filed against Smigel and his firm
for breach of fiduciary duty.5 In return, Caylene agreed to
withdraw her petition to have plaintiff declared incompetent and
the protection from abuse proceeding she had previously
instituted against him.
Under the terms of the stipulation, plaintiff was also
required to transfer ownership of a house the parties owned in
Stone Harbor to Caylene. Caylene had been living in this house,
at least part-time, during the pendency of the parties' divorce
action. However, Caylene allegedly used the Stone Harbor house
as her primary residence after June 2014.
On September 16, 2015, plaintiff filed a five-count
complaint in the Law Division, Cape May County, against Smigel,
Smigel's firm, and Caylene for tortious interference with
contractual relations (count one); interference with prospective
contractual relations (count two); defamation (count three); and
violation of the New Jersey Consumer Fraud Act, N.J.S.A. 56:8-1
5
In accordance with this provision of the stipulation, on June
10, 2014, plaintiff filed a "praecipe" to withdraw the breach of
fiduciary duty action he had filed against Smigel and his firm
with prejudice. Although not a term used in New Jersey, a
"praecipe" is defined at common law in Pennsylvania as a written
motion or request seeking some court action. Black's Law
Dictionary 1192 (7th ed. 1999).
4 A-2722-15T2
to -20 (count four). In addition, plaintiff alleged in count
five that Smigel had engaged in the unauthorized practice of law
in New Jersey.
In his complaint, plaintiff asserted that on July 31, 2013,
he entered into an agreement to purchase a property in Stone
Harbor for himself. He paid a $500,000 deposit to the seller,
which was a New Jersey limited liability company, and planned to
finance the balance of the purchase price. The agreement did
not contain a mortgage contingency.
However, the agreement was contingent upon plaintiff
"be[ing] able to obtain title insurance on the [p]roperty from a
title insurance company authorized to do business in the State
of New Jersey." The agreement also provided that "in the event
[b]uyer fails to close as set forth herein, the amount of
damages sustained by [s]eller will be substantial but hard to
calculate. Therefore, the parties agree that the deposit
represents a fair and true calculation of damages and same shall
be forfeited as set forth herein."
The complaint asserts that on September 19, 2013, seven
days after plaintiff had filed his breach of fiduciary duty
action in Pennsylvania against Smigel and his firm, Smigel faxed
a letter on Caylene's behalf to RBS Citizens, N.A., of
Providence, Rhode Island; Sturdy Savings Bank of Stone Harbor;
5 A-2722-15T2
and Title Alliance of Cape May County, a Stone Harbor title
company. The letter stated:
Please be advised that our firm
represents Caylene Rippon in her divorce
action against [plaintiff]. It has recently
come to our attention that [plaintiff] is
attempting to obtain a mortgage to finance a
home in Stone Harbor, NJ. It is important
that all the entities connected with this
transaction be aware of the following:
1. There is currently pending in
the Court of Common Pleas of
Dauphin County, PA, an action
for support against
[plaintiff] which will
drastically change the income
that [plaintiff] listed in
his loan documents. . . .
[Plaintiff] indicates that
his income is only $207,360
after taxes. (Please see the
enclosed income statement
submitted by [plaintiff]).
2. The funds being used to
secure this mortgage and
establish credit are marital
assets in which [Caylene] has
an equitable interest.
Therefore, [Caylene] would
have an equitable interest in
the title of the house that
[plaintiff] is attempting to
purchase. Should [plaintiff]
go default, [Caylene] will
not be held liable and will
seek to enforce her equitable
interest. . . . There is also
a Protection from Abuse
action filed against
[plaintiff] . . . This
Order requires [plaintiff] to
stay [100 feet] away from
6 A-2722-15T2
[Caylene] who resides in
Stone Harbor, NJ.
3. [Caylene] objects to the use
of the joint marital assets
to secure the mortgage
financed by Sturdy Savings
Bank. It would further be
noted that [Caylene] will use
all equitable means at her
disposal to protect the joint
marital assets until the
conclusion of the divorce.
We understand fully that it is possible
that [plaintiff] did not disclose these
items to you when attempting to secure his
mortgage; however, you are now on notice and
we urge you to take the appropriate action
as [Caylene] will use all legal and
equitable means at her disposal to protect
the joint marital assets.
If you have any questions or comments,
please do not hesitate to contact me.
In his September 16, 2015 complaint in the Law Division,
plaintiff alleged that Smigel's statements on Caylene's behalf
were "untrue" and defamatory. Plaintiff asserted that after the
three companies received Smigel's letter, the banks refused to
finance plaintiff's proposed purchase of the home and he was
unable to obtain other financing. Plaintiff contacted the
seller to advise that he could not purchase the home and the
seller replied that it was going to keep the $500,000 deposit
based on plaintiff's breach of the agreement. The seller later
7 A-2722-15T2
agreed to return, and plaintiff agreed to accept, $250,000 of
the deposit in order to settle the dispute.
Caylene responded to plaintiff's complaint by filing a
motion to dismiss for failure to state a claim and for lack of
jurisdiction. Smigel and his firm filed a motion to dismiss for
failure to state a claim, lack of jurisdiction, and on grounds
of forum non conveniens. Smigel and his firm also asserted that
plaintiff's claims against them were barred by the doctrine of
res judicata based upon plaintiff's prior voluntary dismissal of
his breach of fiduciary duty complaint in Pennsylvania.
In support of Smigel and his firm's claim that New Jersey
lacked jurisdiction over them, Smigel submitted a certification
stating that: (1) his firm was "located in Pennsylvania and
does not have any offices in New Jersey"; (2) he did not live in
New Jersey and did not own any property in this state; (3) the
firm did not advertise in New Jersey; and (4) the firm did "not
regularly provide legal services or perform other transactions
in New Jersey." (emphasis added).
Following oral argument, the trial judge rendered a written
decision on January 20, 2016, dismissing plaintiff's complaint
against all three defendants with prejudice.6 With regard to the
6
At the time of the decision, the parties had not yet conducted
any discovery.
8 A-2722-15T2
question of jurisdiction, the judge stated that Caylene was a
New Jersey resident. Although the judge did not specifically
make a finding that Caylene's resident status meant that New
Jersey had jurisdiction over her, we have assumed he meant to do
so for purposes of this opinion.
However, the trial judge found that New Jersey had "neither
general nor personal jurisdiction" over Smigel or his firm. The
judge found that
[p]laintiff fail[ed] to satisfy minimum
contacts for [d]efendants as the Smigel
[d]efendants merely sent one piece of
correspondence specific to proceedings in
Pennsylvania to advise that [d]efendant's
share of the Pennsylvania marital assets
should not be considered as part of
[p]laintiff's portion of a New Jersey
property. The sole purpose of the letter
was to maintain [d]efendant's position in
the Pennsylvania litigation and had nothing
to do with New Jersey.
Relying upon Smigel's certification, the judge also found that
plaintiff had not established that Smigel and his firm
maintained "continuous and systematic activities" in New Jersey
and did not "regularly provide legal services" here.
The trial judge next found that plaintiff's claims against
Caylene, Smigel, and Smigel's firm should be dismissed on
grounds of forum non conveniens because "New Jersey [was] not
the proper forum." In explaining this portion of his decision,
the judge stated:
9 A-2722-15T2
[I]n the instant matter[,] [p]laintiff
resides in Pennsylvania; did not file the
pending action in his home forum; and New
Jersey's public policy of providing a forum
for its residents does not apply as
plaintiff is not a resident. Although
[Caylene] is a resident of New Jersey, the
crux of the pending case is that the truth
and accuracy of the statements set forth in
the September 19, 2013 letter relate solely
to the protection of the PFA Order and the
marital assets, all of which relate to the
Pennsylvania proceeding.
Finally, the trial judge determined that plaintiff's claims
against Smigel and his firm were also barred by the doctrine of
res judicata. In this regard, the judge found that plaintiff
voluntarily dismissed with prejudice his breach of fiduciary
relationship action in Pennsylvania against Smigel and his firm.
Although plaintiff filed that action before Smigel sent the
September 19, 2013 letter that is involved in this case, the
judge concluded that the dismissal of the Pennsylvania
proceeding acted as an adjudication of all of plaintiff's claims
against Smigel and his firm. Therefore, the judge ruled that
these claims were barred by the doctrine of res judicata.7 This
appeal followed.
7
The judge did not address Caylene's, Smigel's, or Smigel's
firm's contentions that plaintiff's complaint failed to state a
claim upon which relief could be granted under Rule 4:6-2(e),
including Smigel and his firm's assertions that plaintiff's
claims were barred by the litigation privilege and the statute
of limitations for defamation actions.
10 A-2722-15T2
II.
On appeal, plaintiff argues that the trial judge mistakenly
dismissed his complaint for lack of jurisdiction; on the basis
of forum non conveniens; and on res judicata grounds. For the
following reasons, we conclude that the thin factual record
developed by the parties at the time of the judge's decision was
insufficient to support defendants' motions to dismiss on
jurisdictional and forum non conveniens grounds, and that
plaintiff's claims regarding his purchase of the Stone Harbor
home were not barred by the doctrine of res judicata.
Therefore, we reverse the January 20, 2016 order dismissing the
complaint and remand for further proceedings.
A.
We turn first to the question of jurisdiction. A defendant
may move to dismiss a complaint on the ground of "lack of
jurisdiction over the person[.]" R. 4:6-2(b). Appellate review
of a ruling on jurisdiction is plenary because the question of
jurisdiction is a question of law. Mastondrea v. Occidental
Hotels Mgmt., S.A., 391 N.J. Super. 261, 268 (App. Div. 2007).
Our review is thus de novo, while our review of the "court's
factual findings with respect to jurisdiction" is only to
determine if those findings are supported by substantial,
credible evidence in the record. Ibid.
11 A-2722-15T2
When a defendant has maintained continuous and systematic
activities in the forum state, the defendant is subject to the
state's "general" jurisdiction on any matter, irrespective of
its relation to the state. Lebel v. Everglades Marina, Inc.,
115 N.J. 317, 323 (1989). However, when the cause of action
arises directly out of a defendant's contacts with the forum
state, the state may exercise "specific" jurisdiction over a
defendant who has "minimum contacts" with the state. Id. at
322.
A court's jurisdiction is "a mixed question of law and
fact" that must be resolved at the outset, "before the matter
may proceed . . . ." Citibank, N.A. v. Estate of Simpson, 290
N.J. Super. 519, 532 (App. Div. 1996). Presented with a motion
to dismiss on the basis of lack of jurisdiction, a trial court
must make findings of the "jurisdictional facts," because
disputed "jurisdictional allegations cannot be accepted on their
face . . . ." Id. at 531-32.
"Although the plaintiff bears the burden of demonstrating
facts that support personal jurisdiction, courts are to assist
the plaintiff by allowing jurisdictional discovery unless the
plaintiff's claim is clearly frivolous." Toys "R" Us, Inc. v.
Step Two, S.A., 318 F.3d 446, 456 (3d Cir. 2003) (citations
omitted). However, "[i]f a plaintiff presents factual
12 A-2722-15T2
allegations [suggesting] with reasonable particularity the
possible existence of the requisite contacts between [the party]
and the forum state, [the] plaintiff's right to conduct
jurisdictional discovery should be sustained." Ibid. (third
alteration in original) (citation omitted). Generally, the
record must support the existence of disputed or conflicting
facts to warrant jurisdictional discovery. Reliance Nat'l Ins.
Co. In Liquidation v. Dana Transp., 376 N.J. Super. 537, 551
(App. Div. 2005).
If the pleadings and certifications submitted to the trial
court do not permit resolution of the jurisdictional question,
the trial court must conduct a "preliminary evidential hearing
after affording the parties an appropriate opportunity for
discovery." Citibank, supra, 290 N.J. Super. at 532. When a
motion to dismiss for lack of jurisdiction is made, it is only
the jurisdictional allegations that are relevant, not the
sufficiency of the allegations respecting the cause of action.
Ibid.
New Jersey's "long-arm rule" permits personal jurisdiction
to be established over nonresidents by service of a summons and
complaint in whatever manner "due process of law" permits. R.
4:4-4(a)(6); Avdel Crop. v. Mecure, 58 N.J. 264, 268 (1971).
Our courts "will allow out-of-state service to the uttermost
13 A-2722-15T2
limits permitted by the United States Constitution." Ibid. A
defendant must have sufficient contact with the forum state "to
make it reasonable and just, according to our traditional
conception of fair play and substantial justice, to permit the
state to enforce the obligations which appellant has incurred
there." Int'l Shoe Co. v. Washington, 326 U.S. 310, 320, 66 S.
Ct. 154, 160, 90 L. Ed. 95, 104 (1945).
The test for whether the defendant has created a
"substantial connection" with the forum is whether the defendant
"'deliberately' has engaged in significant activities within"
the forum or has created "'continuing obligations' between
himself and the residents of the forum," rather than contacts
that are merely "'random,' 'fortuitous,' or 'attenuated' . . .
." Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475-76, 105 S.
Ct. 2174, 2183-84, 85 L. Ed. 2d 528, 542-43 (1985) (citations
omitted). There must "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." Hanson v. Denckla, 357 U.S. 235,
253, 78 S. Ct. 1228, 1240, 2 L. Ed. 2d 1283, 1298 (1958).
The plaintiff "bears the burden of proof on the question of
the adequacy of the . . . defendants' contacts to sustain an
exercise of specific jurisdiction." Citibank, supra, 290 N.J.
14 A-2722-15T2
Super. at 533. A court should only expect a prima facie showing
of sufficient contacts "[i]n the early stages of a proceeding
. . . ." Jacobs v. Walt Disney World Co., 309 N.J. Super. 443,
454 (1998). A conclusion of specific jurisdiction requires that
the "purposeful acts by the [defendant] directed toward this
State" be of a kind that "make[s] it reasonable for the
[defendant] to anticipate being haled into court here."
Mastondrea, supra, 391 N.J. Super. at 268.
Applying these standards, we are satisfied that the record
in the present matter was not sufficiently developed for the
trial judge to conclude, as he did, that Smigel and his firm
were not subject to New Jersey's jurisdiction. The judge
focused almost entirely on the question of whether New Jersey
had "general" jurisdiction over Smigel and his firm, and did not
adequately address the question of "specific" jurisdiction.
The trial judge incorrectly based his determination that
New Jersey did not have general jurisdiction almost exclusively
upon Smigel's certification in which he stated that he did not
live in the State and that his firm did "not regularly provide
legal services or perform other transactions in New Jersey."
(emphasis added). However, Smigel did not define the term
"regularly" in his certification. Thus, the certification can
clearly be read as a concession that the firm is engaged in the
15 A-2722-15T2
practice of law in New Jersey to some unexplained degree. In
this regard, the certification is even silent as to whether
Smigel or his firm represent New Jersey clients or whether he or
his firm earn revenue from New Jersey clients and the amount of
this revenue.8 Smigel's and his firm's actual contacts with New
Jersey needed to be disclosed on the record before a
determination of general jurisdiction could reasonably be made.
Under these circumstances, we are satisfied that the matter
was not ripe for determination at the time Smigel and his firm
filed their motions to dismiss. Rather, plaintiff should have
been granted an opportunity for jurisdictional discovery to
explore the full involvement of Smigel and his firm in New
Jersey before the matter was presented to the trial court for
disposition. Although such discovery may ultimately result in a
determination that New Jersey does not have general jurisdiction
over Smigel and his firm, plaintiff should not have been
deprived at this early juncture from attempting to establish a
sufficient basis to proceed. Therefore, we are constrained to
reverse and remand the determination that New Jersey lacked
general jurisdiction over Smigel and his firm.
8
The record contains a copy of a transcript in which an attorney
associated with Smigel's firm appeared on Caylene's behalf,
together with her attorney in this appeal, in an unrelated
action in the Law Division, Cape May County. The judge did not
address this representation in his opinion.
16 A-2722-15T2
As noted above, the trial judge found that Caylene lived in
Stone Harbor. Although the judge's written decision does not
clearly state this, we have assumed that based upon his finding
that Caylene was a resident of that municipality, the judge
concluded that New Jersey had general jurisdiction over her. On
remand, the parties may address this issue further in discovery
if, contrary to the judge's implicit finding, there is a factual
dispute as to Caylene's residence and New Jersey's resulting
jurisdiction over her at the time plaintiff filed his complaint.9
Finally on this issue, we address the trial judge's
conclusion that New Jersey did not have jurisdiction over Smigel
and his firm because Smigel "merely sent one piece of
correspondence" to the New Jersey companies concerning
plaintiff's proposed purchase of a Stone Harbor property.10
However, there is case law, not discussed in the judge's
decision, stating that a non-resident defendant can be subject
to this state's specific jurisdiction based on a single tortious
act committed by the defendant in New Jersey. Jacobs, supra,
309 N.J. Super. at 461; See also Burger King, supra, 471 U.S. at
9
In this regard, Caylene's attorney stated at oral argument that
her client now lives in Florida.
10
As noted above, the judge did not expressly address the
question of New Jersey's "specific" jurisdiction over Smigel and
his firm, but may have been attempting to do so by making this
finding.
17 A-2722-15T2
477 n.18, 105 S. Ct. at 2184 n.18, 85 L. Ed. 2d 543 n.18
(holding, contrary to the judge's conclusion, that a single
tortious act can support jurisdiction if it creates a
"substantial connection" with the forum).
Indeed, our Supreme Court addressed this issue in Lebel,
where the plaintiff alleged, among other things, that the
defendant, a Florida resident, acted fraudulently during
negotiations regarding the sale of a boat via mail and
telephone. Lebel, supra, 115 N.J. at 320–21, 326.
Specifically, the defendant called the New Jersey plaintiff from
Florida regarding the sale, sent the contract to the plaintiff
in New Jersey, and received payment. Id. at 324–25.
The Court held that these were sufficient contacts with the
forum state to establish jurisdiction and found it unnecessary
to rely on the plaintiff’s supplemental submission that
"attempted to demonstrate that the defendant sought to penetrate
the New Jersey market by advertising in media that generally
circulated in New Jersey." Ibid. The Court also noted that the
defendant in Lebel was aware of the direct consequences the sale
would have in New Jersey and the possibility that litigation
might arise in New Jersey. Id. at 328.
In so holding, the Lebel Court noted that "the mere
transmittal of messages by mail or telephone within the state is
18 A-2722-15T2
not the critical factor, it is the nature of the contact." Id.
at 325 (citing Baron & Co. v. Bank of N.J., 497 F. Supp. 534
(E.D. Pa. 1980)). "Where a defendant knowingly sends into a
state a false statement, intending that it should then be relied
upon to the injury of a resident of that state, he has, for
jurisdictional purposes, acted within that state." Id. at 326
(quoting Vishay Intertechnology, Inc. v. Delta Int’l Corp., 696
F.2d 1062, 1066 (4th Cir. 1982)). The Court also held that a
state can exercise specific jurisdiction over a non-resident
defendant if he "purposely directs [his] activities to the
forum, and the litigation results from the alleged injuries that
arise out of or relate to those activities." Ibid. (quoting
Hughes v. Balemaster, Inc., 652 F. Supp. 1350, 1351–52 (E.D. Mo.
1987)).
If new motions to dismiss or for summary judgment on
jurisdictional grounds are filed after the conclusion of
jurisdictional discovery on remand, the trial court should
carefully consider these and other relevant precedents in
determining whether New Jersey has specific jurisdiction over
Smigel and his firm. The judge must also permit the parties to
engage in discovery on this issue.
19 A-2722-15T2
B.
We are also convinced that permitting the parties to engage
in a period of discovery prior to considering their motions
would have assisted the trial court in reviewing defendants'
assertion that plaintiff's complaint should be dismissed on
grounds of forum non conveniens. The doctrine of forum non
conveniens is equitable in nature, and allows a court to decline
jurisdiction where the "ends of justice indicate a trial in the
forum selected by the plaintiff would be inappropriate." Kurzke
v. Nissan Motor Corp., 164 N.J. 159, 164 (2000). On appeal, the
judgment of the trial court should not be overturned unless a
clear abuse of discretion is shown. Id. at 165.
For a forum non conveniens motion to succeed, a defendant
must demonstrate that "serious inconvenience" would result if
the case were tried in the plaintiff’s chosen forum. Am. Home
Prod. Corp. v. Adriatic Ins. Co., 286 N.J. Super. 24, 34 (App.
Div. 1995). The defendant must also show that transferring the
case to a different forum will not result in undue hardship to
the plaintiff. Ibid. However, a court must do more than
"merely balance the conveniences." Ibid.
Generally, a court with jurisdiction over a case will honor
a plaintiff’s choice of forum. Yousef v. Gen. Dynamics Corp.,
205 N.J. 543, 557 (2011). This presumption is especially strong
20 A-2722-15T2
where the plaintiff is a resident in the forum state. Ibid.
Nevertheless, the plaintiff’s forum selection is not
dispositive; rather, a court should determine "whether the ends
of justice will be furthered by trying a case in one forum or
another[.]" Ibid. Ultimately, dismissal on forum non
conveniens grounds is not proper unless the plaintiff’s choice
is "demonstrably inappropriate." Ibid. (quoting Kurzke, supra,
164 N.J. at 172).
The first step in a forum non conveniens inquiry is to
determine whether there is an adequate alternative forum for the
case. Varo v. Owens-Illinois, Inc., 400 N.J. Super. 508, 519
(App. Div. 2008). An adequate forum is one where the defendant
is amenable to service of process, and where the subject matter
of the dispute may be litigated. Id. at 520.
Next, there are public and private interest factors a court
must consider. The private interest factors are:
(1) the relative ease of access to sources
of proof, (2) the availability of compulsory
process for attendance of unwilling
witnesses and the cost of obtaining the
attendance of willing witnesses, (3) whether
a view of the premises is appropriate to the
action and (4) all other practical problems
that make trial of the case "easy,
expeditious and inexpensive," including the
enforceability of the ultimate judgment.
[Aguerre v. Schering-Plough Corp., 393 N.J.
Super. 459, 474 (App. Div. 2007), (quoting
Gulf Oil Corp. v. Gilbert, 330 U.S. 501,
21 A-2722-15T2
508, 67 S. Ct. 839, 843, 91 L. Ed. 1055,
1062 (1947)), certif. denied, 193 N.J. 293
(2007).]
The public interest factors are:
(1) the administrative difficulties which
follow from having litigation "pile up in
congested centers" rather than being handled
at its origin, (2) the imposition of jury
duty on members of a community having no
relation to the litigation, (3) the local
interest in the subject matter such that
affected members of the community may wish
to view the trial and (4) the local interest
"in having localized controversies decided
at home."
[Ibid. (quoting Gulf Oil, supra, 330 U.S. at
508-509, 67 S. Ct. at 843, 91 L. Ed. at
1062-63).]
In general, the treatment of the factors is meant to be
qualitative rather than quantitative. Camden Iron & Metal, Inc.
v. Klehr, Harrison, Harvey, Branzberg & Ellers, LLP, 384 N.J.
Super. 172, 180 (App. Div. 2006), certif. denied, 187 N.J. 83
(2006).
Here, the trial judge did not specifically consider these
principles in determining that New Jersey was an inconvenient
forum for Caylene, Smigel, and Smigel's firm. The judge also
did not make sufficient findings supporting his decision as
required by Rule 1:7-4(a). Such findings are critical in a
fact-sensitive forum non conveniens case, especially one where
the property plaintiff sought to buy was in New Jersey; Smigel
22 A-2722-15T2
sent the September 19, 2013 letter to financial institutions
located in New Jersey; one of the defendants, Caylene, lived in
New Jersey; and the other defendants, Smigel and his firm, were
based in an adjoining state and, by Smigel's own admission, did
at least some business in New Jersey. Without sufficient
findings, it is difficult to conclude on this meager record that
New Jersey was not a proper forum for the resolution of
plaintiff's claims.
The trial judge's mistake was likely caused by the fact
that at this very early stage of the proceedings, the record had
not been sufficiently developed to permit the judge to fulfill
his fact-finding obligation. Our Supreme Court has long
recognized that a decision on forum non conveniens grounds is
"enhanced" when it is "reserved until discovery has proceeded
sufficiently to enable the [trial] court to make a better-
informed assessment of the private- and public-interests."
D'Agostino v. Johnson & Johnson, Inc., 115 N.J. 491, 494 n.1
(1989). "Although the factors set forth in Gulf Oil are of
central importance, pre-discovery is ordinarily an inappropriate
point in the litigation at which to consider them." Kurzke,
supra, 164 N.J. at 172.
Thus, the Court has said that "[a]s a general rule, a
motion for dismissal due to forum non conveniens should not be
23 A-2722-15T2
heard unless the movant has made a good faith effort to obtain
discovery and can provide the court with a record verifying that
discovery is unreasonably inadequate for litigating in the forum
chosen by the plaintiff." Id. at 168. Therefore, we reverse
the trial court's decision to dismiss plaintiff's complaint
against all of the defendants on grounds of forum non
conveniens. On remand, the parties shall conduct further
discovery on this issue prior to presenting arguments concerning
forum non conveniens to the court as part of any future motion
practice.
C.
Finally, we do not agree with the trial court's conclusion
that because plaintiff voluntarily withdrew in Pennsylvania his
breach of fiduciary duty complaint with prejudice against Smigel
and his firm, he was barred by the doctrine of res judicata from
filing his present complaint concerning the September 19, 2013
letter.
As our Supreme Court explained in Velasquez v. Franz, 123
N.J. 498 (1991):
[t]he rationale underlying res judicata
recognizes that fairness to the defendant
and sound judicial administration require a
definite end to litigation. The doctrine
evolved in response to the specific policy
concerns of providing finality and repose
for the litigating parties; avoiding the
burdens of relitigation for the parties and
24 A-2722-15T2
the court, and maintaining judicial
integrity by minimizing the possibility of
inconsistent decisions regarding the same
matter.
[Id. at 505 (citations omitted).]
There are three basic elements to res judicata: (1) the judgment
in the prior action must be valid, final, and on the merits; (2)
the parties in the later action must be identical to or in
privity with those in the prior action; and (3) the claim in the
later action must grow out of the same transaction or occurrence
as the claim in the earlier one. Id. at 505-06.
The first and third elements were not met in this case.11
The praecipe that plaintiff filed was not an adjudication by a
court on the merits of his breach of fiduciary duty claim
against Smigel and his firm. Plaintiff simply withdrew that
action as part of a stipulation that plaintiff and Caylene
entered in their divorce action. Nothing in the stipulation
stated that plaintiff was barred from instituting a new
proceeding against Smigel, his firm, and Caylene concerning his
attempt to purchase a home in Stone Harbor. Certainly, the
11
With regard to the second element of the res judicata test,
only Smigel and his firm were named in the Pennsylvania action;
Caylene was not. Although the trial judge did not specifically
find that his ruling on res judicata only applied to Smigel and
his firm, we have assumed that this is the case since Caylene
was not involved as a party in the breach of fiduciary duty
action. Therefore, this portion of the test appears to have
been met with regard to Smigel and his firm.
25 A-2722-15T2
praecipe cannot be considered as a decision or judgment by a
court on the merits of this claim.
The third res judicata element was also not met. For the
doctrine to apply, the causes of action must arise from a single
claim.
[C]auses of action are deemed part of a
single "claim" if they arise out of the same
transaction or occurrence. If, under
various theories, a litigant seeks to remedy
a single wrong, then that litigant should
present all theories in the first action.
Otherwise, theories not raised will be
precluded in a later action.
[McNeil v. Legislative Apportionment Comm'n,
177 N.J. 364, 395 (2003).]
Here, plaintiff filed suit against defendant for tortious
interference with contractual relations for a letter sent on
September 19, 2013, which was one week after he filed his
previous complaint for a breach of fiduciary duty. Thus, this
letter, which serves as the basis of plaintiff's second
complaint, did not even exist until after the first complaint
was filed.
As the United States Supreme Court has recently held, "res
judicata does not bar claims that are predicated on events that
postdate the filing of the initial complaint." Whole Woman's
Health v. Hellerstedt, ___ U.S. ___, 136 S. Ct. 2292, 2305, 195
L. Ed. 2d 665, 680, (2016) (citing Morgan v. Covington, 648 F.3d
26 A-2722-15T2
172, 178 (3d Cir. 2011)). Thus, in accordance with the
reasoning in Hellerstedt, plaintiff's claims concerning Smigel's
September 19, 2013 letter did not arise out of the same
transaction or occurrence involved in the Pennsylvania action,
which pre-dated Smigel's letter. Therefore, the trial court
mistakenly dismissed plaintiff's complaint against Smigel and
his firm based on the doctrine of res judicata.
D.
In sum, plaintiff's claims against defendant were not
barred by the doctrine of res judicata. In addition, we
conclude that the trial court prematurely decided the questions
of jurisdiction and forum non conveniens before an adequate
record was developed through the exchange of discovery on these
legally-complex and fact-sensitive issues. Nothing within this
opinion forecasts any views on the merits of plaintiff's claims
against the three defendants nor on the question of whether
defendants may be entitled to prevail on these issues after a
fuller record is developed and presented to the trial court. We
say no more than that the issues were not fully ripe for
decision.
The January 20, 2016 order is reversed and the matter is
remanded to the trial court for further proceedings. We do not
retain jurisdiction.
27 A-2722-15T2