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Civic Southern Factors Corp. v. Bonat

Decided: July 9, 1974.


For reversal and reinstatement -- Chief Justice Hughes and Justices Jacobs, Mountain, Sullivan, Pashman and Clifford. Opposed -- None. The opinion of the Court was delivered by Sullivan, J.


[65 NJ Page 331] The trial court dismissed plaintiff's complaint applying the doctrine of forum non conveniens on condition that defendant, a resident of New Jersey, accept service of process in New York, the trial court finding that the interests of justice required that the suit be tried in New York. The Appellate Division, in an unreported opinion, reversed, not being convinced that plaintiff should be denied access to the courts of this State or that defendant has decisively demonstrated that New York is the forum where trial will best serve the ends of justice. This Court granted certification. 64 N.J. 319 (1973).

The factual background of the litigation and statement of issue involved have been adequately set forth in the Appellate Division opinion, as follows:

Plaintiff, a North Carolina corporation, is in the business of lending money to commercial borrowers, and acquired a series of 36 promissory notes made by defendant payable to Black Watch Farms, a partnership, who endorsed same to Black Watch Farms, Inc., who in turn endorsed same to plaintiff. The notes sued upon are the last 16 of a series of 36 promissory notes dated January 6, 1969. The basic transaction involved a $100,000 installment sale by Black Watch of a managed breeding herd of cattle. There were apparently hundreds of such herd sales ultimately designed to afford tax shelter benefits to individuals in the high income tax bracket.

Black Watch's offices were in Wappinger Falls, New York and part of the negotiations between plaintiff and Black Watch with respect to opening a line of credit for Black Watch and accepting third party notes as collateral security took place at the Black Watch offices. However, the notes in question were made at defendant's place of business, payable at defendant's bank in New Jersey. Defendant is a resident of New Jersey and was served with process at his place of business in New Jersey.

The basic issue is whether the doctrine of forum non conveniens was properly invoked. In this connection defendant argues that plaintiff is suing two other investors in New York, that there are numerous Black Watch cases instituted by other financing companies pending in New York, and that a federal class action involving 40 plaintiffs, including plaintiff, represented by defendant's counsel is pending in the United States District Court, Southern District of New York. However, Black Watch Farms, Inc., is in bankruptcy and plaintiff states said action has been stayed. Defendant further asserts that depositions are in progress entirely in New York, that plaintiff is not a holder in due course but rather an active participant in a New York securites fraud. Defendant further argues that the employees, officers and records of Black Watch Farms and Black Watch Farms, Inc., are in New York and would be available to process in New York.

The doctrine of forum non conveniens, an equitable principle, is firmly embedded in the common law of this State. Starr v. Berry, 25 N.J. 573 (1958); Vargas v. A.H. Bull Steamship Co., 25 N.J. 293 (1957), cert. den. 355 U.S. 958, 78 S. Ct. 545, 2 L. Ed. 2d 534 (1958); Gore v. United States Steel Corp., 15 N.J. 301 (1954), cert. den. 348 U.S. 861, 75 S. Ct. 84, 99 L. Ed. 678 (1954). In essence, the doctrine means that a court may decline jurisdiction

whenever the ends of justice indicate that trial in the forum selected by the plaintiff would be inappropriate. It is frequently invoked to protect the private interests of the litigants such as availability of witnesses and the ease of access to other sources of proof. Semanishin v. Metropolitan Life Ins. Co., 46 N.J. 531, 533 (1966).

The doctrine comes into play "where a weighing of all of the many relevant factors, of which residence is but part, decisively establishes that there is available another forum where trial will best serve the convenience of the parties and the ends of justice * * *." Gore v. United States Steel Corp., supra, 15 N.J. at 311. In Starr v. Berry, supra, 25 N.J. at 584, Chief Justice Weintraub commented that "[t]he present tendency is to avoid a rigid formula and to weight sundry factors, private and public, which bear upon the justness of a plaintiff's choice. But emphasis continues upon the element of harassment and vexation notwithstanding reference also to the element of trial convenience."

The purpose of the doctrine is to prevent harassment of or injustice to a defendant. By the same token, it may not be used to embarrass or destroy a claimant's opportunity to be heard. Consequently, a plaintiff's choice of forum ordinarily will not be disturbed except upon a clear showing of real hardship or for some other compelling reason. The choice of forum must be demonstrably inappropriate. Whether or not the doctrine should be applied depends on the facts and circumstances of each case. Since the doctrine is equitable in nature, ordinarily the matter is left to the sound discretion of the trial judge. An appellate court should not substitute its judgment for that of the trial judge unless there is a showing of clear abuse of that discretion. Amercoat Corp. v. Reagent Chem. & Research, Inc., 108 N.J. Super. 331, 349 (1970); 20 Am. Jur. 2d, Courts, ยง 175, p. 514.

Applying the foregoing principles to the acknowledged facts and circumstances of this case, we conclude that the trial court properly ...

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